News Corp., the owner of The Wall Street Journal, Dow Jones, and Australia’s Foxtel, will cut more than 1,000 jobs, citing a difficult economic environment and rising interest rates.
In the company’s fiscal Q2 earnings report, CEO Robert Thomson said that the company would shed about 5 percent of the company’s employees, or about 1,250 positions. The cuts, which will be completed by the end of the year, should save the company approximately $30 million.
“Obviously, a surge in interest rates and persistent inflation had an impact on all of our businesses, but in particular, digital real estate and book publishing, which remains a majority physical business and continues to be subject to logistical exigency,” Thomson said on the company’s earnings call. “The reforms now underway at our businesses should create a solid platform for future profitability. Crucially, we will be reducing headcount across the company by 5 percent. That is a necessary response given these macro conditions.”
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And Thomson said that there would be other changes to come.
“We are absolutely focused on reducing costs across our businesses and making price adjustments where prudent,” he added.
News Corp. reported a difficult quarter, with falling earnings amid a tough ad environment. The company also acknowledged that it was still in talks to potentially sell its digital real estate unit.
Susan Panuccio, News Corp.’s CFO, told analysts that the near-term outlook also appears challenging.
“We continue to expect higher costs due to supply chain and inflationary pressures,” Panuccio said. “Advertising conditions remain challenging and visibility is limited.”
And Thomson also heaped praise on Foxtel, the Australia multichannel video provider that is in the midst of a shift to streaming…including being the home for HBO original programming.
Asked about the strategic shift at Warner Bros. Discovery, and the overall push for profits in streaming in the U.S., Thomson argued that Foxtel could be poised to benefit.
“I think we’ve spoken on past calls about the prospect of imperial overstretch among some of the U.S. entertainment companies,” Thomson said. “I think that prognostication is indeed coming to pass, and it also shows you the value of the Foxtel platform.”
“It has evolved from what you might call euphemistically ‘a complicated situation’ to a genuine opportunity, and we will be opportunistic with that opportunity,” he added.
The earnings report was the first since the proposed merger between News Corp. and Fox News was called off by Rupert Murdoch.
