Law Technology News (LTN) is reporting this morning that LexisNexis (LN) will be reducing their headcount by approximately 500 employees in various locations in the United States. You can read the item here. LTN is reporting that the statement was issued by Marc Osborn, senior director of communications for its Research and Litigation Solutions unit. LN had not responded to my request for more information at the time of this post.
I wonder if this due in part to the adoption rate of Lexis Advance not meeting expectations? I’m not aware of solid data on this point but I do know that Lexis seems to be experiencing challenges similar to those experienced by Thomson Reuters with WestlawNext. I have some thoughts on this but will leave that as a post for another day.
I just received this response from Marc Osborn at LexisNexis in response to my queries:
LexisNexis continuously reviews its needs, operations and other factors to identify what resources and services are necessary to optimally support our customers and improve business operations. As a result of this ongoing process, we regularly build teams in certain areas of the business and reduce in others to be able to deliver next-generation solutions to customers.
Reed Elsevier is the parent company of LexisNexis. A cursory review of the Reed Elsevier Interim Results for 2Q 2013 indicates that revenue declined during the first 6 months of 2013. The transcript of the quarterly earnings call to analysts also referred to a decline in growth at the Earnings per Share (EPS) level. Although it would be interesting to see the effect LexisNexis had on these numbers, it wasn’t available at this time. Unfortunately, it is common for businesses to reduce expenses in order to increase (or prop up) EPS rather than find ways to address the decline in revenue. This is a temporary solution at best. Depending how this is done, this can result in the business being ill prepared to meet customer demands or to keep their products fresh and relevant.