Tenth of Reuters jobs destined for India

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The Independent Online

Reuters is to open a new facility today in India that will employ up to 10 per cent of the company's staff within two years. The data centre in Bangalore is part of the information giant's "Fast Forward" programme, which seeks drastically to reduce costs.

Reuters is to open a new facility today in India that will employ up to 10 per cent of the company's staff within two years. The data centre in Bangalore is part of the information giant's "Fast Forward" programme, which seeks drastically to reduce costs.

It is estimated that graduate workers in India cost about a quarter of what it would cost to employ a similarly skilled person in the US or Europe.

The Bangalore centre will also employ a small number of journalists who will report on company news coming out of the US. Reuters has stressed that the 20 Indian journalists are not replacing any employed in the US. They will be reporting on small companies that are not covered by US journalists.

The Fast Forward programme, started last year, aims to cut the staff numbers by 3,000 to 13,000. About 10 per cent of this total is likely to be employed at the Bangalore centre, which will initially have 350 staff. The data centre will process, analyse and check the vast amount of financial information available to Reuters users. There are three other Reuters data facilities already in existence, in the UK, the US and Singapore.

The company believes data centres can be located anywhere and this function does not need to be close to clients. Reuters also has a software development centre in Thailand. Outsourcing will make a substantial contribution to the £440m that the company aims to cut from its cost base by the end of next year. This approach contrasts with the strategy pursued by Reuters' biggest competitor, Bloomberg, which has decided not to outsource jobs. Analysts said the City would watch closely to see which business model worked out better.

Anthony de Larrinaga, an analyst at SG Securities, said: "Getting the cost base down allows Reuters to compete at lower price points." He said the company was making progress and was "moving towards flat revenues" in its core business, after three years of shrinking sales. Reuters' fortunes are tied to those of the financial services industry, which is its primary customer.

Most analysts expect Reuters to see flat sales for next year as a whole, which would require the company to experience growth in the second half to make up for a first half that is forecast to still be in negative territory. As well as cutting costs, the Fast Forward programme has been about refining the company's product range. After some delays, all the major new products have now been launched.

Tom Glocer, the chief executive, is now beginning to flesh out the company's strategy post-Fast Forward. This will partly focus on making Reuters news available directly to non-financial consumers in the home and he is also exploring new markets that the company can enter.

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