Published February 13, 2013
Thomson Reuters (TRI) plans to cut 2,500 jobs this year, or 4% of its global workforce, as it continues to axe costs as part of a larger overhaul.
The company said on Wednesday that it expects to spend about $100 million on severance costs, predominantly in the first quarter. A majority of the cuts will take place in its finance and research division.
Shares of Thomson Reuters slumped 2% in morning trade.
The New York–based publishing and financial services giant said its turnaround is about halfway complete and remains on track, which includes simplification across the business, improved transparency, disciplined spending and leadership transformation.
The overhaul efforts position Thomson Reuters to “build a foundation for stability in 2013 and profitable growth in 2014.” The company said net sales will gradually improve with product rollouts, customer service improvements and consolidation.
The announcement comes as Thomson Reuters posts fourth-quarter operating profit of $658 million, up 2% from $646 million a year ago.
Excluding one-time items, it earned 60 cents a share, topping average analyst estimates of 55 cents in a Thomson Reuters poll.
Revenue for the three months ended Dec. 31 increased 2% to $3.36 billion from $3.31 billion a year ago, narrowly missing the Street’s view of $3.37 billion.
The performance was driven by a 2% improvement in legal revenues, as well as a 3% sales increase in its tax and accounting division and an 11% jump in intellectual property.
Thomson Reuters expects its Financial & Risk business, which was flat during the quarter, to turn positive in the second half of the 2013.
Separately, the company’s board on Wednesday approved of a 2-cent a share increase in the annual dividend to $1.30 a share, making the quarterly payout of 32.5 cents payable on March 15 to shareholders of record as of Feb. 25.
Thomson Reuters is currently estimating fiscal 2013 sales to grow in the low-single-digit range, though it anticipates operating profit margin shrinking slightly to between 16.5% and 17.5% from a year-earlier 17.7%.