VNU to cut 4,000 jobs, sell European unit to 3i
Monday, December 18, 2006; 7:25 AM
LONDON (Reuters) - VNU (VNU.UL), the world's largest market research firm, plans to cut 4,000 jobs next year, or about 10 percent of its workforce, and has agreed to sell its European business magazines to private equity firm 3i (III.L).
The moves announced on Monday are the first major steps to overhaul VNU, which was bought by a group of six private equity firms earlier this year, under new Chief Executive David Calhoun, who was hired from General Electric Co. (GE.N).
VNU plans to permanently reduce its cost base by 10 percent in 2007 by whittling down layers of management and stripping out real estate and technology costs. Most of the job cuts will come from non-client-facing activities, VNU said, although it did not specify further.
VNU, with headquarters in both the Netherlands and New York, employs about 42,000 people and posted revenue of about 3.5 billion euros ($4.6 billion) in 2005.
"This strategy -- and supporting structure -- give us the flexibility and speed we need to respond to evolving market imperatives and access more of the resources we need to continue investing aggressively for the future," Calhoun said.
Susan Whiting, a 28-year VNU veteran who was CEO of the Nielsen TV ratings business, will become executive vice president of VNU and work across the entire company to develop new products.
Meanwhile, VNU is selling its European business magazines, collectively know as Business Media Europe (BME), to 3i for an undisclosed price. One person familiar with deal, who requested anonymity, put the figure at about 320 million euros.
Sources familiar with the plans had told Reuters in August that a sale of the unit was under consideration.
Among the titles in the portfolio are Britain's IT Week and Accountancy Age and the Dutch Intermediair job listings guide.
The sale includes BME's operations in Britain, the Netherlands, Spain, Italy, Germany and Belgium. The proposed sale of the unit's French operations is still under discussion.
The private equity firms that bought VNU, including Carlyle Group (CYL.UL) and Kohlberg Kravis Roberts & Co. (KKR.UL), pledged to keep it substantially together as an integrated company for 18 months.
In addition to its well-known TV ratings business, VNU also gathers and sells consumer tracking information and publishes specialty magazines such as Billboard and Hollywood Reporter.
(Additional reporting by Megan Davies in New York)