Telerate Trims 20 Jobs, Bans New Hires In Expense-Cut Campaign

Ten days ago Dow Jones Telerate discontinued the jobs of some 20 of its employees and imposed a freeze on future hires. The steps were taken following a budgetary review (IMD, Sept. 13) in which the vendor's department heads were challenged to cut their expenses by up to 10 percent by year-end.

At the same time, staff have been urged to defer expenditures until January, in order to improve the vendor's fourth-quarter earnings performance, sources say. A Dow Jones spokesperson declines to comment.

Not all Telerate departments resorted to layoffs in their efforts to meet the expense-cut goals. Those that did fire away were the vendor's international marketing, development and operations groups -- each of which lost three to five staff. On the regional side, Telerate's operations and its sales and marketing groups each also cut about four staff.

Meanwhile, the hiring freeze has effectively cut another 45 or so personnel from the vendor's headcount; these were positions for which staff had been requisitioned but not yet hired. All tolled, Telerate Americas is left with approximately 750 employees.

Telerate's recent cutting spree is the result of a top-down assessment of the vendor's cost structure. Dow Jones' earnings results indicate that for the past two quarters rapidly rising expenses have cut deeply into Telerate's revenues.

While revenues have also been rising, such increases have come at a slower rate than cost increases. Last quarter, for example, the vendor's operating costs were up 12 percent over the same period the previous year, while revenue was up only seven percent. As a result, operating income dropped a whopping 13 percent (IMD, April 26).

The impact of the budgetary review was felt first in Telerate's Europe/Gulf operations; the ax fell there earlier this month, lopping off some 30 personnel.

Separately, Martin Church, once the managing director for Telerate's Europe/Gulf region, has been moved to a new post: Last week, the vendor announced internally that Church would henceforth be senior managing director, serving as a liaison to other Dow Jones units and as a sort of goodwill ambassador to major clients.

Dan Casey, previously Church's deputy, assumes the managing director post in his wake. Both Casey and Church will report to Julian Childs, executive vice president for Telerate regions. Casey was hired by Childs when the two worked for Telerate in Asia, sources say.