Reuters Rouses Writers' Wrath
By
Rich Smith
March 22, 2005
|
"The Journalists disdain to conceal their views and aims. They openly declare that their ends can be attained only by the suspension of all existing bylines. Let the ruling classes tremble at a Journalistic revolution. The writers have nothing to lose but their chains. They have contract concessions to win. Journalists of all countries, unite!"
Aside from a few editorial tweaks here and there, thus ran the concluding two paragraphs of Karl Marx's (no relation to Groucho) Communist Manifesto, first published in 1848. I offer them up in the spirit of brotherhood with our comrades at the U.S. offices of Reuters Group PLC (Nasdaq: RTRSY) as they embark upon a byline strike against their corporate masters in London -- the second such strike in three months. It's a stratagem that has met with some success in recent years in writers' disputes with companies such as Dow Jones (NYSE: DJ) and The Washington Post (NYSE: WPO), but for its part, Reuters doesn't seem likely to be swayed.
Back in England, Reuters faces similar threats from Britain's National Union of Journalists. Yet the company continues its unpopular (in New York and London -- likely quite popular in Bangalore) campaign to cut costs by shifting more and more of its staff to low-wage countries such as India. By the end of this year, Reuters plans to have fully 10% of its international workforce, 1,500 persons, working out of offices in India; of those, as many as 100 will be writers/editors. Meanwhile, here in the U.S., journalists have been working for Reuters without a contract for more than two years now. And contract negotiations appear to be making little progress, with minimal pay raise offers being offset by Reuters' demands that workers bear more of their own retirement and health costs. Pouring salt in the writers' wounds, at the same time as Reuters squeezes them for concessions, it's given company execs three straight years of pay raises.
Who will prevail? Class bias aside, I suspect the writers will ultimately win out -- but not because of the byline strike. Moving data processing jobs to Bangalore may make economic sense. And menial writing jobs, too -- the kind that read: "Cisco (Nasdaq: CSCO) reported $0.10 in pro forma earnings today, beating estimates by a penny," full stop -- can probably be phoned in from anywhere. But if Reuters tries to outsource writing jobs that require a cultural connection to the country being written about to people with no real connection to that country, it may well find that it's getting what it's paying for. In a bad sense.
But that's a mistake that Reuters will have to make on its own. Perversely, if the byline strike succeeds, it may actually save Reuters from itself.
Extra, extra! Read all about Reuters' continuing feud with its employees!
Fool contributor Rich Smith owns no shares in any company mentioned in this article. While he's no journalist (just an investor with a virtual megaphone) he's joining in the byline strike for kicks.
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