Tuesday, February 19, 2008


Reed Elsevier cost cuts to claim 1,000 jobs
Mark Kleinman and Jonathan Sibun writing in The Daily Telegraph

Reed Elsevier, the Anglo-Dutch media group, is drawing up plans to axe more than 1,000 jobs as part of a continuing efficiency drive, The Sunday Telegraph has learned.
The company, which owns the LexisNexis information service and the medical journal, The Lancet, is understood to be preparing to cut the jobs over the next couple of years as it centralises functions such as procurement, human resources and IT across the group. Analysts expect the job cuts - the majority of which will take place outside Britain - to contribute to a restructuring that will shed as much as £100m from Reed's annual costs bill. It is unclear whether the cuts will be acknowledged formally in its annual results announcement on Wednesday.
Reed, which is listed in London and Amsterdam, employs nearly 37,000 people around the world. The proposed job reductions are thought to be focused on functions that have previously operated separately across the disparate parts of Reed's empire, which includes units specialising in science and medical, legal, and business publishing, the last of which includes a large exhibitions division.
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Sir Crispin Davis, Reed's chief executive, told analysts last July that the cost cuts would be "fairly spread" across the group and that the efficiency programme, dubbed "One Company", would continue for the next two to three years. He said at the time: "We've taken the low and mid- hanging fruit. It's why we put in [train] this programme and I think it's been very effective in identifying new areas. Over the last six months we've taken that a step further... with the objective of continuing to deliver meaningful cost reductions across the business."
Analysts have welcomed the proposed cost-cutting exercise. In a research note entitled "Stand and Deliver", Morgan Stanley analyst Patrick Wellington branded the full- year results announcement "pivotal".
He said: "Reed will announce a cost-cutting programme with the aim of saving around £100m over two to three years."
Analysts have speculated that Reed could announce a further share buyback programme on top of the $4bn (£2.04bn) it has returned over the past eight months.
Reed refused to comment ahead of Wednesday's results announcement.

Footnote:
Reed Elsevier sold their NZ arm, Reed Publishing, to Penguin Books late in 2007.

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