Reuters Dealing decline flattens in third quarter

TECHNOLOGY NEWS

LONDON -- The decline in demand for Reuters Dealing products may have bottomed out, according to the firm’s third-quarter interim results, announced two weeks ago.

Dealing systems’ revenues for Q3 were down by 7%, which was less than the 9% decline for the first half of 2001, year-on-year.

Julie Holland, manager of Reuters Treasury division in London, said: "There is good evidence to show that while overall headcount reductions are substantial in our clients, FX and money market front office headcounts have already declined substantially since 1998.

"In other words, we have taken that pain and now may be at the right level to meet the changed market conditions. This has shown through in our own Dealing figures, where the decline appears to have bottomed out," said Holland.

Revenues from Reuters Trading Solutions overall grew 9% to £213 million (US$313 million). Strong solutions sales helped offset a decline in transaction revenues.

At the announcement of the results, Holland also outlined the future of Reuters’ customer-led Treasury division, which will now span four interdependent dimensions: information -- news and market data; liquidity -- Dealing 3000 Matching; transactions -- or conversational Dealing; and single and multi-bank portals to serve the buy side and automate deal flow into the banks.

The Treasury division as a whole is on track to make more than £1 billion this year -- and supplies about 35% of the total group revenues.

The firm also outlined a cost-cutting phase to prune another 500 jobs in 2002, on top of the 1,100 jobs originally slated to go. Of the 1,600 total, 600 have already been laid off, said chief executive Tom Glocer.

Philip Green, Reuters’ chief operating officer, said: "We intend to have notified all of the 1,600 targeted by the end of November this year, with the exception of a small number of groups, where this will not be possible until early next year."

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