News Corp Australia will cut one in 20 staff at its local operations after Rupert Murdoch’s global company posted a 47% decline in earnings in its news media division and lower quarterly revenue overall.
Mastheads the Australian, the Daily Telegraph and the Herald Sun are among those facing cost-cutting and a 5% headcount reduction after a decline in earnings for Murdoch’s international newspaper stable of US$59m.
The chief executive of News Corp, Robert Thomson, broke the news of a 1,250 jobs reduction after presenting the company’s second-quarter results in New York on Friday morning, Australian time.
“Obviously, a surge in interest rates and acute inflation had a tangible impact on all of our businesses,” Thomson said.
“But we believe these challenges are more ephemeral than eternal. Just as our company passed the stress-test of the pandemic with record profits, the initiatives now under way, including an expected 5% headcount reduction, or around 1,250 positions this calendar year, will create a robust platform for future growth.”
News Corp’s mastheads include the Wall Street Journal and New York Post in the US and the Sun and the Times in the UK.
Shares in the company fell 1.4% in extended trading after its first quarterly report since Murdoch’s decision to withdraw a proposal to reunite News Corp and Fox Corp, which is led by his son Lachlan Murdoch.
The decision not to reunite his media empire puts the long-term future of the financially stretched titles owned by the newspaper baron at risk.
Last month Murdoch scrapped a decade-long ambition to reunite News Corp and Fox after opposition from investors and youngest son James.
Cost-cutting has already begun at Holt Street where the chief finance officer, Michael Murphy, this week told staff the “uncertain economic environment” meant spending on travel, gifts, entertainment and mobile phones had to be “appropriate for our business needs”.
“In the period since Covid, we have seen a steady increase in discretionary expenses incurred such as travel, entertainment and gifts to staff and third parties,” Miller said in a memo seen by the Guardian. “As we navigate a more uncertain economic environment, we must ensure that our spend in these areas is appropriate for our business needs. In some cases, this will mean restricting our travel and making appropriate and sometimes difficult choices.”
Staff can claim a maximum of $20.50 a month for work-related mobile phone costs, a significant reduction on what they were once able to claim.
Results for the Foxtel Group and Dow Jones offset some of the declines, however, as the company’s Australian streaming products continued to grow in popularity.
Foxtel Group’s total subscribers have reached 4.3 million, up 10% on the prior corresponding period.
The total number of streaming subscribers, including to sports service Kayo Sports, Binge and Foxtel Now reached 2.68 million, up 25% year-on-year.
The company expects the job cuts to generate annual cost savings of at least $130m.
“We are absolutely focused on reducing costs across our businesses and making price adjustments where prudent,” Thomson said.
News Corp indicated it was still in talks to potentially sell its digital real estate unit, Move Inc, owner of Realtor.com, to CoStar Group, for up to $3bn.
The national masthead the Australian has had a bruising start to the year, losing two senior editors after allegations of inappropriate behaviour and axing youth title The Oz due to poor subscriptions and traffic.
