WOLTERS KLUWER, parent company of Australian information services provider CCH, has announced that it will shed eight per cent, or 1,600, of its worldwide workforce in a bid to shore up its revenue growth of three to four per cent by 2007.
Nancy McKinstry, Wolters Kluwer’s new chairman, made the announcement in London last week, saying that the job cuts would occur over a three-year period.
“2004 will be a year of dramatically restructuring our cost base,” she said.
McKinstry said that as part of the cost-cutting the company would sell or cut low-growth operations with around $226 million in annual sales.
However, a spokesman for CCH Australia said that it was “very much business as usual” for the local operation. While the revenue figures for the Australian operation would seemingly put its head on the chopping block, the spokesman indicated that CCH’s realignment with the United States operation meant that it was safe.
In a “back to the future” move, the Asia Pacfic’s integration as part of the US operations meant that the Asia Pacific was part of the division which represented 37 per cent of the Wolters Kluwer revenue.
Wolters Kluwer will change fundamentally from a financial holding company to an operationally focused one. Five customer-facing divisions will replace the former cluster structure and the CEO of each division will report directly to McKinstry. The five divisions are: Health; Corporate & Financial Services; Tax, Accounting & Legal (USA and Asia Pacific); Legal, Tax & Regulatory (Europe), and Education.
Wolters Kluwer will improve its cost base with sustainable cost reductions of $393 million from 2003 to 2006. From 2007 onwards, annualised savings will be $164 million. These cost savings will be realised by restructuring operations, streamlining back-office functions, developing shared services, and consolidating real estate holdings.