A source sends us what are purported to be internal notes from Bloomberg CEO Peter Grauer’s talks with the sales force on Feb. 18 and the news division on Feb. 21. We will update if we get any comment/colour/confirmation from the company. Highlights:
- Bloomberg had a strong January but expects the near-term environment to get tougher.
- The US is “closer to a recession than people think” (Our read: In a recession). The recession will trigger a global downturn, even in India and China (but perhaps not emerging markets).
- The downturn will last through 2008 and for the first six months of 2009
- Bloomberg will slow hiring dramatically, maintaining nearly flat headcount
- There is less than a 5% chance that Mike Bloomberg will run for president and zero chance that he will win.
- Staff turnover accelerated to 12.6 per cent in 2007 from 8.5 per cent in 2006. This level of turnover is “fine.”
- Lots of departing employees complain about limited opportunities for career development (this strikes us as strange based on other comments we hear out of Bloomberg LP).
*2007 was the best year in Bloomberg’s history. We sold more than 30,000 terminals. We had 12 per cent growth in unit terms and 16 per cent revenue growth. We gained market share (but we don’t know how much) and grew faster than the market and our competitors. Tradebook grew 18 per cent by revenue to some $420 million. Data grew 47 per cent. Order management grew 67 per cent. Ad revenue grew 15 per cent. In all, non-terminal business revenue grew 28 per cent to about $825 million. We met or exceeded all targets for the year.
*2008. The target is 22,000 terminals. It was the best January in Bloomberg history. However, we tend to lag our customers’ business by a couple of quarters and we’re noticing more removals this month (Feb.) than the historical pattern. We’re now in a cyclical downturn and the outlook is more difficult. Business will get tougher. The downturn will last through 2008 and probably the first six months of 2009.
* The U.S. is “closer to recession than people think.” A recession would not last long, though it would trigger a global slowdown, even India and China. Our customers say they are still adding headcount in emerging markets.
*One of our goals for 2008 is to enter new businesses and find new ways to do things better. “We are a company of ideas and innovation.” “If you don’t feel you are getting the kind of satisfaction you want, come to me. .. I assure you that if it works you will be rewarded for it.”
*In 2006 we hired 2500 new people and had a net gain of 1250. In 2007 we hired 2000 and had a net gain of 810. At the end of the year there were 225 open PDSKs and we will fill them. After those are filled, our goal for 2008 is to keep headcount flat.
*On the US presidential race: Obama has momentum and will likely get elected. It is “incredibly exciting for our country.” A McCain/Obama race seems to “preclude an independent candidate.” If it had been Huckabee/Edwards there may have been more opportunity. Mike will need to decide by the first week in March and the chance of him running is “less than 5 per cent.” If he runs his chance of winning is “diminimus.”
*We must be more disciplined in what we do. For example in
performance reviews there is too much grade inflation. The
bell curve in rankings is supposed to work like this:
1 – 7.5%
However the number of people who ranked 5 or 6 last year
was 5.6 per cent, not 22.5 per cent as it should have been.
We need to have a “cogent dialogue with people about what
they are good at” and recognise that the firm has “finite
*Staff turnover was 12.6 per cent in 2007, up from 8.5
per cent in 2006. That number is “fine” and will likely
decline this year because of fewer opportunities elsewhere.
*On Career Development. Grauer says he reads every exit interview and has “observed” that many people leaving have expressed
concern about their “career development” at the company.
He is focusing on how we can be more responsive and let
people know about opportunities in the firm, including
other departments/geographic locations.
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