Bloomberg not expected to reach revenue goal by 2014
Joe Pompeo of Capital New York reports that Bloomberg LP expects to fall short of its goal to hit $10 billion in annual revenue by 2014, meaning its employees won’t get the large bonuses promised to them at that time.
Pompeo writes, “The bonuses, separate from the standard annual bonuses Bloomberg employees receive every February, would be more than 70 percent of the average annual salaries employees had earned from Jan. 1, 2009 through the point the company reached its goal.
“As with all Bloomberg memos, the math was a little arcane, but employees quickly totted up the totals, creating a big incentive to work hard and, most importantly, stick around for the crucial moment.
“But in a new memo sent to employees on Dec. 6 by Bloomberg Chairman Peter Grauer and C.E.O. Dan Doctoroff, the bad news was broken: That outcome no longer seems likely within the projected timeframe.
“‘Despite our best efforts, it is clear it will take us longer to reach this goal,’ the memo, obtained by Capital, reads in part.
“In the meantime, employees will receive a more modest interim bonus in August of 2014: somewhere between 10 and 15 percent of what they will have earned on average from Jan. 1, 2009 through the end of 2014. The rest of the 70 percent will be paid whenever the company finally hits the magic $10 billion mark, if you’re still around then.
“Bloomberg L.P. first announced in 2008 that it believed it could reach $10 billion in annual revenue by 2014. Employees of the company, which owns the Bloomberg Terminal technology, Bloomberg News and Bloomberg Businessweek magazine, receive a progress report at the end of each year.”
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“We could not have foreseen the market turmoil that soon followed” the 2008 announcement, last week’s memo read.
Revenue for 2012 is expected to cap at $7.92 billion, up from $7.59 billion a year earlier, Grauer and Doctoroff said in the note. And new subscriptions to the Bloomberg terminal, the cornerstone of the business, have slowed down dramatically in the last year.