Reuters To Halt Drift Of Power To New York From London

Reuters Holdings PLC managing director and chief executive officer Peter Job is seeking to reverse the internal drift of power from the company's head office in London to New York, home of Reuters America (RAM). The move stems from RAM's track record of little if any profit and delayed product launches, which sources say irked Job during his stint as head of Reuters Asia (RA).

At the same time, Job is reorganizing top-level management at Reuters. Sources say Andre Villeneuve, managing director of RAM, will return to London to become Job's deputy. Villeneuve will retain operational responsibility for RAM, and assume additional responsibility for Reuters Asia, but only until new regional heads can be recruited in those areas. Once on board, the regional heads will report to Villeneuve.

David Ure, managing director of Reuters Europe, Middle East and Africa (REMA), will continue in that role. He will report directly to Job. The reshuffling is seen as a consolation prize for Villeneuve and Ure, who both ran in competition with Job to succeed Glen Renfrew for the top position at Reuters.

Brian Vaughan, president of Reuters Information Services Inc., is also slated to move back to London, sources say, as is John Ransom, Villeneuve's administrative deputy.

Sources say Job is determined to make RAM profitable, but at the same time revert it back into a mere region, as opposed to an overseas head office. According to sources at Reuters, Job's decision to tone down RAM is part of his new executive plan for the company. These sources say Job is disaffected with the North American market, which Reuters has failed to penetrate, particularly in the retail equities brokerage area, despite pouring resources into the region.

The sources say Job has doubts about the strategic importance of the U.S. His predecessor, Renfrew, had tried to make New York an equal partner with Reuters' London headquarters. The process began in earnest when Renfrew moved responsibility for Reuters' real-time information products group to New York under Buford Smith from London under John Parcell (Micro Ticker Report, July, 1988).

Renfrew later split responsibility for the merged real-time and historical information and trading room systems groups between Smith, who took responsibility for product development, and David Morgan in London, who heads the group's marketing function. New York is also home to Reuters' transactional products group under John Hull.

The sources say Job was stunned by the delays experienced by Reuters' Globex and Dealing 2000-2 projects. Globex is an automated futures-trading system being developed by Reuters for the Chicago Mercantile Exchange and the Chicago Board of Trade. The Globex project, slated for startup around year- end, has been delayed from its initial launch date in 1989. The introduction of Dealing 2000-2, Reuters' planned order- matching system for the interbank foreign exchange market, was postponed for "at least six months" last fall.

RAM has seen product delays and cancellations in other areas. Reuters' proposed Bloomberg-Killer -- Decisions 2000 -- remains unreleased more than a year after its scheduled introduction. A series of retail brokerage-oriented market data products -- among them Equitron and Spectra -- that was to use Reuters SDS3 satellite distribution network failed to materialize. Equities 2000, with which Reuters had planned to spearhead its assault on the U.S. market for equities data, failed to find a significant foothold -- Prudential-Bache Securities Inc., which had agreed to equip its New York headquarters with the system under a $28 million deal, eventually opted out.

Sources say Job has let product managers -- in all regions, not just RAM -- know that products that are late may never get delivered at all. The sources say he is tired of grand schemes that result in nothing but delays, embarrassment and cost overruns.

Job also is planning to make major cuts in Reuters' infamous middle-management layer. Sources say Job has identified this layer as a possible obstacle to on-time delivery of products to market. Job isn't expected to make any major announcement of his proposed job cuts; sources say he plans, rather, to make cuts quietly and in a piecemeal fashion. But that doesn't mean the cuts won't be wide-ranging -- sources at Reuters indicate that layoff figures as high as 1,000 have been mentioned.