News Corp said on Thursday it would cut 5% of its workforce, or 1,250 jobs, after the media conglomerate missed Wall Street’s quarterly estimates for profit and revenue, hurt by declines in its business, including news. .
The company also said it incurred $6 million in one-time costs associated with its plans to merge with Fox Corp, which Rupert Murdoch, chief executive of News Corp and co-chairman of Fox, ruled out in January.
A slump in advertising spending by companies hit by rising inflation and higher interest rates has hurt a key source of revenue for companies like News Corp, which publishes the Wall Street Journal.
“A rise in interest rates and acute inflation has had a tangible impact on all of our businesses,” Chief Executive Robert Thomson said in a statement.
The company’s shares fell nearly 3% in extended trading on Thursday.
To combat the slowdown, Thomson said there are a number of initiatives underway, including job cuts. The layoffs will be made across all companies and will result in annual savings of at least $130 million.
The company said that in the third quarter it expects to see one-time costs related to the withdrawn proposal from Fox-News Corp and the previously announced exploration of a sale by Move Inc, which operates the Realtor.com website, to CoStar Group.
The Dow Jones division, which includes the WSJ, reported an 11% increase in revenues to $563 million for the quarter, with strong growth in its professional information business.
WSJ and Barron’s Group subscriptions reached 5 million for the first time. However, earnings were down 3% year-on-year to $139 million.
News Corp’s second-quarter advertising revenue fell 10.6% to $464 million. Fox’s advertising revenue for the December quarter increased 4% thanks to the boost from the World Cup and the midterm elections in the United States.
Total revenue was $2.52 billion for the second quarter ended Dec. 31, while analysts on average were expecting $2.55 billion, according to Refinitiv data.
Adjusted earnings per share were 14 cents, while analysts had expected 19 cents.
Source: CNN Brasil
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