Reuters plots its road to recovery

Reuters, the embattled financial information company, is to pursue partnerships to provide independent research on stocks and bonds as part of its recovery strategy.

On Tuesday, chief executive Tom Glocer will set out a three-year plan to revive Reuters' fortunes. This will involve cutting 1,000 jobs, getting out of many of its software development activities and focusing on the group's historic core of providing financial information.

The proposals will come as Reuters is forced to announce a loss of up to £500m, caused by one-off costs, goodwill writeoffs and poor trading. Its shares are at a 10-year low.

One of Mr Glocer's plans is to exploit the pressure on large investment banks – such as Citigroup, UBS Warburg and CSFB – following US investigations, led by the New York attorney general Eliot Spitzer, into conflicts of interest in the wake of the Enron and WorldCom scandals.

Mr Spitzer at first pushed for the two sides of the business to be split. He then softened the stance so long as there were tough rules to stop analysts writing research to support corporate finance deal makers. Last week the Financial Services Authority issued similar guidelines for the City.

Reuters is hoping to exploit this by providing its own research service, initially in partnership with an independent research house, then possibly by buying into the research side of a larger investment bank.