Legal Technology Journal

LexisNexis has frozen employee salaries at 2008 levels as the transatlantic publishing giant moves to control costs and parent company Reed Elsevier warns of a tough year ahead.

A spokesman for Reed Elsevier confirmed that the freeze will take effect across LexisNexis worldwide, only excepting increases as a result of a promotion or in jurisdictions where local law dictates that salaries are increased in line with the cost of living.

In the UK, LexisNexis is currently talking to staff to implement the freeze. Managing director Josh Bottomley said: “While we are continuing to invest in products and services to meet and anticipate the needs of our customers, we are also taking steps to carefully manage and control costs across the organisation.

“We are in discussions about salary increases. In the UK we have engaged our staff council and other groups to review our budgeted assumptions.”

Bottomley added: “Our focus remains the same, helping customers to be competitive and providing sustainable job opportunities and career development for our people.”

The news comes as Reed Elsevier revealed its financial results yesterday (19 February), with revenue from continuing operations up by 16% to £5.3bn but a 24% slide in pre-tax profit to £617m. Adjusted operating profits – stated before amortisation of intangible assets and deductions for exceptional restructuring and acquisition related costs - were up by 21% to £1,379m.

Despite deteriorating economic conditions in 2008 LexisNexis performed well, with annual revenue up by 22% to £1.9bn and adjusted profit up 26% to £513m. Electronic products now account for 46% of international revenues.

Reed Elsevier’s chief executive officer, Sir Crispin Davis, said: “The key professional markets served by Elsevier and LexisNexis (which account for over 80% of Reed Elsevier’s adjusted operating profits), whilst not immune to the impact of the economic downturn, are more resilient than most, and these businesses benefit from a strong subscription base and the growing demand for online solutions.”

However Sir Davis added: “In business-to-business markets the demand for advertising and marketing services is much more affected by the tougher economic environment. Our businesses here are expected to show a significant profit decline this year. Whilst the short term outlook is more challenging, the portfolio restructuring, continued development of workflow solutions and the aggressive cost programme are standing Reed Elsevier in good stead for the future.”