Reuters, one of world's biggest providers of financial information, is likely to cut its workforce by more than 1,000 as part of a drive to transform the company, say analysts.

The move, part of a two-year plan to refocus Reuters on to the net, is seen as necessary if the company is serious about increasing margins in all of its divisions.

In 1999, for example, its information division operated on a margin of 16%. Reuters chief executive Peter Job wants to increase that to 20% in two years.

By then Mr Job, a former journalist who has been with Reuters for 38 years, will be close to retiring - he leaves in July 2001 - and City sources have made it clear that the company needs a salesman for its products.

Already in the running are Tom Glocer, the boss of Reuters Information who has just been promoted to the board, and Philip Green, who was poached from logistics company DHL to run Reuters Trading Solutions.

Paul Richards, media analyst at West LB Panmure, said: "They have set themselves a very aggressive target. It is clear that there will be an element of staff cuts as part of this."

However, he said that it was unlikely that Reuters would "cut swaths of staff in one go". Instead the company would handle the loss in a "gentle way", redeploying staff where it could.

Reuters has been quietly reworking itself into a internet-based information provider. It recently announced that it will invest some £500m over four years as it shifts focus to providing services via the net.

Last year, Reuters stock took a dive as analysts said the company had yet to deliver a net strategy.

Then the City said the company had not foreseen the threat from online brokers who had hit Reuters big clients - the broking houses. Nor had the group noticed that the internet meant sellers of real-time financial information (such as the London stock exchange) did not have to go through an intermediary (such as Reuters) to get to the buyers of information (such as the banks).

As part of its new strategy, Reuters has formed a series of divisions within the company which it is planning to float off separately.

Those headed for the market include incubator Greenhouse Fund, which has investments in 60 companies, notably Yahoo! in 1994, and Instinet, its share-trading company which its is planning to float next year.

Credit Suisse First Boston estimates that Greenhouse could be worth £2.9bn and Instinet £3bn, or a total of 442p per share. The investment bank says that Reuters is worth at least £13 per share. Reuters closed at £12.59 on Friday.