Thomson Reuters: Easy Cost Cutting? Not for 3,000 Jobs
October 30, 2013
I spoke with a former publishing executive last week about what he called “easy cost cutting.” Publishers like Thomson Reuters, Wolters Kluwers, and Pearson have been tightening their WalMart belts for some time. Chasing down expensive off site meetings and taking close looks at senior executives authorized expenditures is good business management.
Publishing companies have been struggling to get back to the good old days of William Randolph Hearst. But the cost of paper, pesky worker demands, the sky rocketing cost of buying advanced systems and then paying to try and get the systems to work so old fashioned work processes can be streamlined, upstarts like former middle school teachers who start a blog and give away the content for free, Amazon and its silly “anybody can publish” approach to content, environmental costs associated with ink and disposal of unsold printed matter, and the lousy outlook for law, accounting, library, and other high value materials are making life tough.
How tough?
Well, the story “Thomson Reuters to Cut 3,000 Jobs in Second Layoff Round This Year” suggests life is getting pretty tough. Now that the easy cuts are gone, heads have to go away. Thomson Reuters is interesting because it has had some senior management turnover in the past two years. The article pointed out:
Third-quarter net income attributable to common shareholders fell 39 per cent to $271 million, or 33 cents a share, from $441 million, or 53 cents, a year earlier. Operating profit, which excludes one-time items and businesses that have closed, declined 15 per cent to $316 million in the period.
Thomson Reuters is revenue and profit oriented. So, the decline is worrisome.
However, set aside the serious problems at Thomson Reuters. Let’s ask a larger question, “What about Thomson Reuters as a flagship outfit?”
My view is that Thomson Reuters, particularly when headed by Michael Brown, was a pretty well managed outfit. Now the company seems to be signaling that the ship is listing. Thomson Reuters is not lying on the bottom of the Mediterranean Sea, but the company has got to make some changes that return the company to its former posture. Growth requires more than acquisitions in Argentina. Leadership requires more than a new crew in the pilot house.
Many publishing companies are in a similarly precarious position. The private companies do not have to report their financial woes, but they are evident if one pokes into specific markets; for example, the library sector. Libraries are not rolling in cash. The companies dependent on libraries for revenue are going to have to shop at the WalMart belt display too. Newspaper publishers are interesting. Perhaps Jeff Bezos knows how to make the Washington Post the Miley Cyrus of the dailies? Book publishers are trying to figure out what to do with the 300,000 to 600,000 self published books likely to be generated this year. Most are no good, but the sheer volume underscores the challenge the folks in London and New York face from an unemployed Webmaster with an Amazon account or Apple’s publishing software.
Will more layoffs occur? I hope not. Thomson Reuters once was the leader of the publishing pack. Is it now the leader in the headcount reduction derby? Worth monitoring.
Stephen E Arnold, October 30, 2013
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One Response to “Thomson Reuters: Easy Cost Cutting? Not for 3,000 Jobs”
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One of the major problems with publishers now is that most are now owned by the 5 largest Media Companies. All that means is there is now little interest in helping new authors, but “grab the blockbusters and run with them as long as you can to make us money.”
Google and Hathi-Trust book projects have not made the authors’, reporters’, lives any easier either.
One of our association authors, self-published through Amazon, is making over $10,000 in just a few short months. He didn’t have to wait years for some editor with an agenda to get through to his mss. Yes, I suspect romance fiction is hot, but it seems DIY is the only way for anyone to get attention and published any longer. Even our newspapers are no longer paying columnists (not sure why they still write for the papers.) A newspaper editor told me he liked my essays, but ‘couldn’t’ publish them…never gave a reason why not. I suspect it was because I wanted payment. I wrote a feature for a national magazine and the editor put it in “letters to the editor.” It was then picked up for free by an aggregator…all without my permission. And yes, I’ve written some free items; lots of them, but to help others, not to line the pockets of the publishers.
Only when publishers start again to pay for worthy authorship will publishers eventually rally and become again what they once were. For now, I suspect they will continue to fail, given who owns them.
As an editor of two publications for our writers association, I have little respect any longer for large publishers. I used to like to go to libraries to read magazines…now most of those have been dropped, and in place of hard copy, I have to sit at a terminal to read with my neck screwed up. We used to get magazines through libraries and even the Internet Public Library, but now JTOR, MUSE, EBSCOhost and others have aggregated them and “selling” to libraries electronically…often the only way to now get them…with little or nothing trickling back to the writers/authors.