: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 quarterly Wall Street estimates for profit and revenue, hurt by declines across its businesses including news.
The company also said it incurred $6 million in one-time costs associated with its plans to merge with Fox Corp, which News Corp Executive Chairman and Fox Co-Chairman Rupert Murdoch scrapped in January.
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.
“A surge in interest rates and acute inflation had a tangible impact on all of our businesses,” Chief Executive Robert Thomson said in a statement.
Shares of the company were down nearly 3 per cent in extended trading.
To combat the slowdown, Thomson said there were a number of initiatives underway, including the job cuts. The layoffs will be made across all businesses and result in savings of at least $130 million on an annualized basis.
The company said that in the third quarter it expects to see one-time costs related to the withdrawn Fox-News Corp proposal and its previously announced exploration of a sale of Move Inc, which operates the Realtor.com website, to CoStar Group.
Advertising revenue in the second quarter fell 10.6 per cent to $464 million during the quarter. Fox’s ad revenue in the December quarter rose 4 per cent thanks to a boost from the World Cup and the U.S. midterm election.
Revenue was $2.52 billion in the second quarter ended Dec. 31, 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.
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