March 13, 2011

Crain's New York Business

There's no stopping this jobs generator

NYC's fastest-growing employer is none other than Bloomberg LP, up 3,400 jobs since "08.

Though the subject may never come up in City Hall discussions about job cuts, Mayor Michael Bloomberg has created an employment program for New York that has worked like a charm. He just can't take credit for it while he's in office.

Bloomberg LP, the financial information giant he founded in 1981, has emerged in recent years as the fastest-growing company in New York. Since 2008, it has added 1,800 jobs in the city, for a total of 6,500 here. It plans to add 1,600 more in Manhattan in 2011.

The privately held company is run day-to-day by Chairman Peter Grauer and President Daniel Doctoroff, although the mayor, as majority owner, weighs in on the bigger decisions.

Bloomberg LP has gotten plenty of attention for acquiring BusinessWeek in 2009 and hiring journalists in record numbers for its news division. But in fact, most of the 12,900-employee company's hires have been techies and salespeople dedicated to the Bloomberg Professional service.

Also known as the Bloomberg Terminal, the platform provides data, analytics, portfolio management tools, electronic trading systems—and some 85% of the company's nearly $7 billion in annual revenue. More than 300,000 subscribers pay around $1,700 a month for the service.

Wall Street has added jobs in recent months, and the information-services sector that Bloomberg is part of has also seen gains. But nobody in New York is hiring like the Lexington Avenue colossus.

“That [amount of hiring] is pretty much unheard of,” said Barbara Byrne Denham, chief economist for real estate services firm Eastern Consolidated. “[Bloomberg] can take risks because they have this cash cow—their terminals—which provides the capital they can invest in new industries.”

Those new industries include Bloomberg Law, a vast legal research service that recently has hired hundreds of lawyers; Bloomberg Government, a Washington, D.C.-based service for regulatory and political news; and Bloomberg Sports, which offers the company's expertise in data and analytics to fantasy baseball participants and Major League Baseball teams.

But in the fiercely competitive world of desktop information, Bloomberg's edge has been its ability to constantly add new functions to the terminal, like its Middle East Turmoil page, which can spin out “oil stress” scenarios.

Creating those new products and explaining them to clients requires an army of staffers in the areas of research and development, analytics and sales.  More than 500 R&D technicians alone will be hired this year, joining a global total of 2,500—most of whom are packed into the company's 6-year-old glass-walled headquarters tower.

A company full of quirks
“Many other companies have these [divisions] outsourced in Asia,” said Melinda Wolfe, who heads human resources and confirms she's been a lot busier than her counterparts at other local companies. “We have the lion's share of our research and development people here.”

To accommodate growth, Bloomberg recently signed a lease for 400,000 square feet, or close to half its current Manhattan footprint, on Park Avenue at East 42nd Street. It will begin filling the space later this year.

A company full of quirks, Bloomberg is not for everyone. Though it is known for paying well and providing generous benefits, life along its sleek open-plan floors can seem like a 21st century version of Modern Times. Employees are required to always wear their identity badge, and their whereabouts are tracked electronically pretty much at all times. And a staffer who takes a job elsewhere can never come back, a spokeswoman confirmed.

Company executives say that knowing where employees are simply makes the workplace more efficient. But the regimentation and lack of privacy have caused some new hires to flee.

Terminal velocity
Bloomberg's continued growth is hardly guaranteed, as it battles rival information giant Thomson Reuters, which also provides a desktop data and analytics service.

“They are the two behemoths, and it's an increasingly challenging market,” said Larry Tabb, chief executive of research firm TABB Group. “There's very little [business] that doesn't come directly out of the pocket of a competitor.”

Some believe that Bloomberg's recent gains have come at Thomson Reuters expense.  Bloomberg's share of the financial information market rose to 30% in 2010 from 27% in 2008, according to Burton-Taylor International Consulting LLC.  Revenue last year was $6.9 billion, up 10% from the prior year's total.
Thomson Reuters share slid to 33% last year from 35% in 2008. (A Thomson Reuters spokesman said that no one was available to comment.)  The next largest player is IDC, with 4% of the market.

Bloomberg's gains are reflected in the metric of most importance to its top executives: the number of terminal subscribers.  After dipping to 265,000 during the depths of the financial crisis in 2009, according to Burton-Taylor, the number is now at a record high of more than 300,000.

“As the economy has [improved], the people who had given up their Bloombergs have come back,” said Douglas B Taylor, managing partner of Burton-Taylor. “They're not going to a competitor.”

Bloomberg LP continues to explore new areas of growth and has been looking at developing a real estate information service, for instance, according to an industry executive. A spokesman declined to comment.

“We're always interested in finding ways to expand,” Ms. Wolfe said.  “We scope out niches where we think there is opportunity.”

With the mayor planning to lay off more than 4,000 teachers, maybe an educational service is next.
by Matthew Flamm