The news that Thomson Reuters (NYSE: TRI) was shaking up its struggling Markets division was no surprise, but there’s not much confidence that the company’s CEO Tom Glocer can engineer a quick fix. As we reported yesterday, Markets Division CEO Devin Wenig, a 17-year-veteran of the company who helped manage the integration between Thomson and Reuters when the two merged three years ago, is out; Glocer will take over management of the reformed division.
Thomson Reuters is calling for a meager 4 percent gain in revenues for Q2, which the company will be reporting in full next Thursday. Bernstein Research analysts say in an investors note (pdf) that their already bearish 2.2 percent growth expectation for the division may still be a bit too optimistic and could be revised down further.
In addition to Wenig being gone, Thomson Reuters outlined a streamlined approach to the Markets division, which has been reduced from four to three parts: the new Financial Professionals & Marketplaces unit is a combination of the former Sales & Trading and Investment & Advisory businesses. The other two units are Enterprise Solutions, which is being expanded as well, and Media (as a Reuters rep clarified, “Media” is a Markets business that sells the news to media clients. “News,” which was made a central asset with Stephen Adler’s appointment, stays the same. News is what Media sells, but it is also in Reuters’ financial, legal and Tax products.)
Part of the reason that Bernstein remains so dubious about a quick turnaround in the Markets division is that it’s so dependent on the number of individuals in the “securities, commodity contracts and investments” sector and hiring has not picked up in recent months, nor does anyone expect it to. So, at the moment, the only solution Thomson Reuters had was to simplify and reduce. Bernstein adds that the second half of the year is likely to be more challenging as financial services and investment firms lower their staffing levels further.
The Media unit within the Markets division should be fairly immune to the changes, given that it’s a relative blip within that segment: it only supplies about 4.4 percent of Markets’ revenues, according to Bernstein.