News Corp plans job cuts, misses estimates for earnings
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News Corp said it would cut 5 per cent of its workforce, or 1,250 jobs.
PHOTO: AFP
NEW YORK - News Corp said on Thursday that it would cut 5 per cent of its workforce, or 1,250 jobs, after the media conglomerate fell short of second-quarter Wall Street estimates for profit and revenue, hurt by declines across its businesses including news.
The company also said it incurred US$6 million (S$8 million) in one-time costs associated with its plans to merge with Fox Corp,
A slump in advertising spending by businesses hit by rising inflation and higher interest rates has dented one of the major sources of revenue for companies such as News Corp, which publishes the Wall Street Journal (WSJ).
“A surge in interest rates and acute inflation had a tangible impact on all of our businesses,” said chief executive Robert Thomson in a statement.
Shares of the company were down nearly 3 per cent in extended trading.
To combat the slowdown, Mr Thomson said there were a number of initiatives under way, including the job cuts. The layoffs will be made across all businesses and result in annual savings of at least US$130 million.
The company said that for the third quarter, it expects to see one-time costs related to the withdrawn Fox-News Corp proposal and its previously announced exploration of a sale of Move, which operates the Realtor.com website, to CoStar Group.
The Dow Jones division, which includes the WSJ, reported an 11 per cent rise in revenues to US$563 million for the second quarter, with strong growth in its professional information business.
Subscriptions for the WSJ and Barron’s Group approached five million for the first time. However, earnings were down 3 per cent from a year ago, at US$139 million.
News Corp’s advertising revenue for the second quarter fell 10.6 per cent to US$464 million. Fox’s ad revenue in the December quarter rose 4 per cent, thanks to a boost from the World Cup and the United States mid-term election.
News Corp’s total revenue was US$2.52 billion for the second quarter ended Dec 31, while analysts on average expected US$2.55 billion, according to Refinitiv data.
Adjusted earnings per share came to 14 US cents, while analysts expected 19 US cents. REUTERS
