Thread regarding Refinitiv layoffs

After the earnings call disaster today, with the stock dropping 3%, it turns out a lot of the things pointed out in this thread were accurate and analysts have picked up on this.

Guidance has been constantly restated and it’s clear there is no earnings growth that can be attributed to the partnership.

The whole thing was an investor manipulation scam and the market sees that now and the stock has reacted accordingly.

@2Dpjw+1teO0XTi Rumor is he’s next up to carry the can for the partnership mess

The person leading workspace now (and this partnership) is well known industry wide as totally incompetent.

When it comes to LMP and the senior managers that lead it, failure is a habit.

9th of May a GM from Microsoft that works closely with LSEG blogged with this article "3 lessons in financial services AI transformation from the LSEG-Microsoft partnership". While he started by praising on the surface the effort
"18 months into the 10-year partnership, we’re seeing incredible progress in bringing that joint vision to reality—with generative AI playing a pivotal role. ", the rest of the blog was a criticism of product execution (or lack of it).

7 months after that article and 2 years into the partnership, nothing tangible from the "incredible" progress. Quarter after quarter the same story - Someone tests something somewhere and they are on track to deliver it, until they aren't.

Open Directory communities... plural! What a joke! Bloomberg says we have a community of 320k users. You get a Terminal and you have access to the community. Someone should ask, how many clients and how many members they have in each of these communities and what it takes to enable someone to access one of these "communities" over MS Teams. And if these communities exist, how are they integrated with the Workspace ecosystem and what are the projections of for example trading activity through this channel.

The CEO himself, some months ago, referring to this project during an interview admitted that the compliance is a nightmare!

Bottomline, Open Directory it's great for their fantasy world and on their Powerpoint presentations but in the real world, it’s useless, it’ll crash and burn. Another failure.

@2sfyt+1teO0XTi Workflows senior management reduced scope and effectively restated again in a public update just posted on LSEG website:

“Our strategic partnership with Microsoft has already begun to enhance and enable our Workspace ecosystem, with Financial Meeting Prep – a Microsoft Teams gen AI application powered by LSEG data – now available in public preview.”

Confirms this was built by Microsoft and not LSEG (just uses LSEG data) and states it’s in preview (not publicly released after all, as previously stated in earnings)

“At the same time, I am hugely excited about the deliverables of our strategic partnership with Microsoft which are enabling augmentation of users through AI and intuitive experiences. Interoperability between Microsoft and Workspace, allows us to meet customers where they are, anywhere, anytime, through web, desktop and mobile, while simplifying users’ workflows.

Open Directory, that will enhance collaboration, is also externally piloted with targeted communities.”

First paragraph doesn’t state at all what was built or align with previous guidance. Open Directory was stated in earnings for Mid next year, now moved up. Still no clear detail on what it is and how it aligns to original announcements.

Fairly obvious now that the LSEG Microsoft partnership is just a marketing exercise with no actual product development or new revenue lines.

As Waters said previously inferred, Workspace is just another closed desktop terminal despite how LSEG would like people to believe otherwise.

A recent interview from Waters with LSEG D&A senior management begins to expose the LSEG Workspace - Microsoft partnership as a marketing scheme or even a possible guidance manipulation effort. If you look at a timeline based on publicly available information in earnings calls, linkedin posts, articles, etc, everything looks as follows:

December 2022:

• LSEG announces a 10 year partnership with Microsoft. This involves a commitment from LSEG to spend $2.8 billion in cloud services with Microsoft over 10 years, and in exchange, Microsoft takes a 4% stake in LSEG. This 4% stake is $2 billion of the existing Thomson Reuters/Blackstone shares and not a new investment. The press release also claims a "step change in the development of Workspace by creating an all-in-one data, analytics, workflow, and collaboration solution, specifically designed to help finance and investment professionals improve communications and productivity while maintaining regulatory compliance." A special version of Teams, financial models in excel, and seamless interaction between Workspace and Office 365 are referenced as deliverables. The deal also changes the terms of the lock-up with Thomson Reuters/Blackstone so less shares can be sold until January 2025, when the full stake can be sold.
• Several months prior, the CEO of LSEG Data & Analytics (the leading business unit for the group) announces she is leaving LSEG following a period of successful growth. This is the beginning of a large number of middle/senior management and executive resignations or departures over the next 18-24 months.
• Several videos are shown on social media sites and the first earnings call, depicting an improved experience for investment banking and capital markets professionals. These videos have the style of marketing videos and do not appear to be product demos.

March-May 2023:

• LSEG CFO announces her intent to leave the firm for another position.
• LSEG Microsoft partnership items are announced in the full year earnings call as 1) SSO 2) LSEG content in Microsoft apps 3) Deep interoperability 4) Collaboration in Teams 5) LSEG Bots. At face value, none appear to be items that required a special partnership requirement to achieve as other companies build similar things with Microsoft using their publicly available developer tools.

June/July 2023:

• A new CEO of LSEG Data & Analytics is announced, with experienced outside of the fintech vendor space but prior experience at a tier one bank. A new head of Workspace is also announced through press releases and industry publications, an executive position that either didn't exist or didn't have a public profile since Workspace was launched in April 2020 (prior to the LSEG acquisition of Refinitiv).

August 2023:

• H1 update says Microsoft partnership items are on track, without a specific indication of which items are being referred to.

October 2023:

• As part of capital markets day, the new CEO of LSEG Data & Analytics announces that the Microsoft partnership items are as follows: Open Directory, Interoperability, and AI CoPilot. These items seem to differ somewhat significantly from previous announcements, that were stated as "on track" in August.
• Two demos are shown, one for Microsoft Fabric and one for Meeting Preparation. Both look to be vaporware demos and the CEO of LSEG D&A uses the words "will build", referencing that its more marketing demos.
• A roadmap is shown with "Meeting preparation", "Open Directory" and "Interoperability" for LSEG Workspace, shows a release or pilot of all by end of 2024.

March 2024:

• Microsoft deliverables are said to be on track for external pilots in H1 during the earnings call.
• Capital Markets head, COO depart.

Summer 2024:

• New demo video is shown during an earnings call of something called "Workspace Teams" with Open directory. This looks to be a marketing video and is referred to as "shows what LSEG is working on". This was never announced in prior earnings calls, there no ETA on it. Seems to be a mechanism for sharing and chatting in Teams, but isn't the special version of Teams that was announced prior.
• Meeting preparation is indicated for a Q4 release, but LSEG senior management is unclear on how it will be monetized.
• Previously indicated external pilot guidance didn't seem to be met, but there is no comment on that.
• Articles in several publications position Workspace as a new competitor in the desktop space (it has been around since 2020), with Microsoft providing development.
• LSEG earnings report indicates that 0% of the required $2.8 billion on cloud services has been spent so far.

October/November 2024:

• Meeting preparation is announced by Microsoft as generally available on their own paper with quotes from LSEG. A dig into their developer docs, it is a Teams Marketplace App developed by Microsoft that can use LSEG's data but it is not required. Seems at face value that LSEG had minimal involvement in this product, but its promoted widely by LSEG as a partnership launch.
• Waters interview with LSEG head of Workflows pushes hard on information on Microsoft's involvement in Workspace, and gets many non-answers and references to older Workspace projects as progress. Op-ed intro criticizes the messaging that competitors are closed compared to LSEG. Infers that customers should want more information on whats being built.
• Earnings call guides that Open Directory is coming in h2 2025. This is far behind prior guidance without a restatement or acknowledgement. CEO says that Microsoft products will be monetized with Workspace licenses and price increases. This conflicts with open strategy messaging if LSEG plans to put a premium price on top of existing Teams' costs.
• LSEG announces a Vision Pro version of workspace developed with EPAM. No mention of how this fits with the Microsoft version of Workspace.
• Yesterday, LSEG announces a GenAI/Search/NLP pilot in Workspace, without much details on it. There is no mention of Microsoft at all which is truly peculiar. Microsoft is a leader in GenAI, LSEG has a partnership, why would this be done separately? Everything else involving Workspace promoted Microsoft. This announcement seems to be a watershed moment that something is very "off".

In conclusion: Based on public information, there are of inconsistencies with the messaging on products in the Workspace/Microsoft partnership. Lots of deadlines have been missed and pushed back, names of projects changed, demos shown and then changed drastically or not delivered. A large number of executives and middle management has been exited or left. As an investor, you can start to assume this is all for show and there is no actual substance to it. That wouldn't be a big deal, if not for the fact that the Microsoft partnership is being constantly promoted by LSEG as the main reason to buy their products. Because of that, it begins to look like they are misleading their customers and potentially investors.

Would be interesting to see a more valid news source pick this story up and see how far the inaccuracies go. LSEG stock is up massively since the partnership came to be, and it trades as at significant premium to its competitors. Is that based on guidance on a partnership that isn't as it seems?

It's too soft.

Quarter after quarter and nothing, yet. OD was pushed for H2 2025 (if I recall correctly, they had said it was for EoY 24), it seems they ditched also the Workspace lite on Teams and from the latest earnings call it seems Meeting Prep wasn't well received... On top of that, they told us, they don't expect direct revenue from these projects. Ah how I could forget, they will have the SSO ready by EoY... wow! Let's wait and see if any client will go through the pain to enable it for their organization. They may start with educational institutions, though and call them a client.

Someone would find difficult to don't call it a fiasco. How far is what was delivered from the "vision" protected on the videowall...

I wonder what may have gone wrong... Maybe the clients didn't care about OKRs after all or maybe they got rid the people who actually knew what they were doing, had a go-to-market strategy, knew how to monetize these projects and hired someone useless to lead it?

All of these is just speculation of course, who knows what really happen. Maybe the plan from the beginning was "overpromise and underdeliver".

On a different topic and nothing to do with the WS leadership team, I'm just sharing this turkish proverb I found on Internet.

"When a Clown moves into a Palace, he doesn't become a King. The Palace instead becomes a Circus"

2 years into the partnership, workspace team made a teams widget for putting some data alongside teams meetings. Something a college CS student could have made in a weekend. Analysts calls announced an open directory for chatting in teams and a workspace lite in teams app. Revenue will be generated from price increases to workspace.

Obvious things and no new revenue streams. Big yawn.

https://resourcehub.lseg.com/lseg-financial-markets-2024

The circus goes on the road, first here today and then next week in NY. Will they show how the Microsoft partnership will make LSEG profit? Or will they play yet another pre canned demo? Or something in between?

https://www.waterstechnology.com/front-office-tech/7951060/lseg-symphony-vie-to-build-a-linkedin-for-capital-markets

It looks like they are working on a LinkedIn for financial services with Microsoft. But this was written over a year ago and there doesn’t seem to be anymore announcements about it.

It’s going great, we are very excited!

https://www.lseg.com/en/microsoft-partnership