The banking industry has seen an uptick in job cuts in 2016, however following a static Q3 2016, Thomson Reuters (NYSE:TRI) has also opted to axe upwards of 2,000 jobs across its financial and risk business, according to a company statement.
The announcement follows on the heels of a Q3 earnings report and several memos to Thomson Reuters’ management team. The group had also unveiled a new structure from sales GTM to product management in place. In addition, the company will also be consolidating many roles in various business segments.
Thomson Reuters presently is pegging the number at approximately 2,000 jobs, which will be primarily incurred amongst its financial and risk business and the recently created enterprise, technology and operations group. Per its Q3 earnings, the data and news conglomerate also planned to take on a Q4 charge of $200 million to $250 million, which were connected to the cuts. Overall Thomson Reuters estimated these initiatives would affect about 2% of its workforce.
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The decision to cut nearly 2,000 jobs was made to help spark Thomson Reuters’ transformation program, thereby simplifying and streamlining its business – as such, the group hopes to see run-rate cash savings into next year at about the same level as the Q4, offsetting any future impact.
Thomson Reuters (NYSE:TRI) recently reported a net income of $286 million in Q3 2016, down marginally from $293 million in Q3 2015 on revenues that were stagnant at $2.74 billion. By extension, the group is expected to see a full-year underlying profit margin of between 16% and 17%, though this will be lower than the previous forecast of 18.4%-19.4%.
According to Jim Smith, Chief Executive Officer, Thomson Reuters, in a recent statement on the cuts: “Our core subscription businesses are moving in the right direction, our cost controls are working and we are increasingly confident in our execution capability. That is why we are going to pick up the pace of our transformation efforts.”
Despite the announcement, Thomson Reuters (NYSE:TRI) share prices jumped to $41.24 during US trading Tuesday, up 4.64% at the time of writing.