Thomson Reuters Corp. chief executive officer Tom Glocer is stepping down, to be replaced by chief operating officer Jim Smith in the latest of a series of moves aimed at turning around the fortunes of the company's largest division.
The announcement on Thursday comes after a string of other prominent executive departures since the summer. The weak performance of Thomson Reuters's Markets division, which focuses on financial and news products, has dragged down the company's results and its share price, which has fallen 27 per cent since the beginning of the year.
The launch of its new Eikon desktop data product did not go as well as expected, and growth slowed since the beginning of this year. In July, reports surfaced that the company's board had given Mr. Glocer a year to turn around Markets – with pressure also coming from its controlling shareholders, the Thomson family. (The Thomson family holding company, Woodbridge Co. Ltd., also owns a controlling stake in The Globe and Mail.) July also saw an executive exodus, with the head of markets, Devin Wenig, and Chris Ahearn, president of Reuters Media, both leaving.
Mr. Glocer's efforts, including a promise to return to stronger revenue growth by 2013 – were not enough. The moves take effect on Jan. 1, ending his 10-year term as CEO, first of Reuters Group PLC, and then of Thomson Reuters following its sale to Thomson Corp. in 2008.
Following the executive moves in recent months, which included naming Mr. Smith to the COO role, Mr. Glocer took control of the financial division himself. Last quarter, the company's 6-per-cent revenue growth was still driven primarily by the Professional Division's legal and accounting products. In November, Mr. Glocer said the division's results were improving and kinks had been ironed out.
“By the end of this year, the organizational, strategy and budget work I have been leading will be complete, and the transition plan I launched last summer will have achieved its objectives,” Mr. Glocer said in a statement Thursday. “Jim Smith is a very talented executive with whom I have worked closely over the past four years; he is ready to lead Thomson Reuters.”
Mr. Smith's ascension to the CEO post is not a surprise appointment: he is close to the board, and as former head of Professional, he marshalled the strong performance of the division. His leadership signals the company's desire to model its fortunes after its stronger segment. Before the Reuters deal, he had been chief operating officer of Thomson Corp. and had been working with the family's various businesses since he joined the Thomson Newspaper Group as a journalist in 1987.
“Jim Smith will provide strong leadership for Thomson Reuters at this juncture. He has earned the respect and confidence of his colleagues and the board alike,” David Thomson, chairman of Thomson Reuters, said in a statement. “His instincts and his customer focus have been the basis of a remarkable career in our business.”
Neither Mr. Glocer nor Mr. Smith were available for comment Thursday.
Also on Thursday, the company announced the expected reorganization of its business, which ends its division between Professional and Markets and instead divides the company into six business units: Financial & Risk; Legal; Intellectual Property & Science; Tax & Accounting; Media; and Global Growth Organization. The idea is to reorganize the company around each of its customer segments, to help with quicker decision-making.