On Friday, News Corp said that it would cut approximately 5 per cent of its workforce which accounts for 1,250 jobs after the media behemoth fell short of quarterly Wall Street estimates for profit and revenue, disturbed by a decline across its businesses including news, the company said.
Source: The Fortune
In an official statement, the company also stated that it has incurred $6 million in one-time costs which are associated with its plans to merge with Fox Corp. According to Reuters, in January, News Corp Executive Chairman and Fox Co-Chairman Rupert Murdoch scrapped the plan.
A drastic decline in advertising expenditure by businesses hit by rising inflation. It is also said that higher interest rates have dented one of the major sources of revenue for companies such as News Corp, which publishes the Wall Street Journal.
In a statement, Chief Executive Robert Thomson, said that a rise in interest rates and acute inflation had a tangible impact on all of its businesses. The company’s shares were down nearly 3 per cent in extended trading.
Reuters reported that Thomson further added that there were some initiatives in process to counter the slowdown which includes layoffs.
The company’s Chief Executive said, “The job cuts will be made across all businesses and result in savings of at least $130 million on an annual basis.”
In the third quarter, the company looks forward to see one-time costs related to the withdrawn Fox-News Corp proposal and it has earlier announced exploration of a sale of Move Inc, which operates the Realtor.com website, to CoStar Group, the statement read.
In the second quarter, the advertising revenue plummeted by 10.6% to $464 million, while, in December, Fox’s ad revenue quarter surged by 4%, all credits to a boost from the World Cup and the US midterm election.
In the second quarter that ended December 31, revenue was $2.52 billion, while analysts on average expected $2.55 billion, according to Refinitiv data. Adjusted earnings per share were 14 cents, while analysts were expecting 19 cents.
News Corporation, also known as News Corp, is an American mass media and publishing company and it has its headquarters in Midtown Manhattan, New York City. The second incarnation of the original News Corporation, it was formed on June 28, 2013, following a spin-off of the media outlets of the original News Corp as 21st Century Fox.
