News Corp, parent of media outlets including the Wall Street Journal and Dow Jones, announced plans to cut headcount by 5%, eliminating about 1,250 positions, with its CEO citing “obvious global challenges.”
The media and publishing company, led by exec chairman Rupert Murdoch, said the job cuts would occur in this calendar year. News Corp reported earnings for the quarter ended Dec. 31, with revenue down 7% year over year to $2.52 billion, while net income fell 64% to $94 million. Adjusted earnings per share of 14 cents fell short of the analyst consensus estimate of 19 cents.
“Obviously, a surge in interest rates and acute inflation had a tangible impact on all of our businesses,” CEO Robert Thomson said in prepared remarks. News Corp’s initiatives “now underway, including an expected 5% headcount reduction, or around 1,250 positions this calendar year, will create a robust platform for future growth.”
News Corp has been “actively engaged” in discussions with CoStar Group about a potential sale of real-estate listing company Move, Thomson added.
Ad revenue on a consolidated basis was down 11% year over year, to $464 million. The company’s overall earnings before interest, taxes, depreciation and amortization (EBITDA) dropped 30%, to $409 million. News Corp attributed the EBITDA decline primarily to higher costs in its Dow Jones segment and higher operating expenses in its News Media segment (which includes News Corp Australia and News UK) partly due to inflationary pressures, along with lower revenue and a $30 million negative impact from foreign currency fluctuations.
Dow Jones’ circulation and subscription revenue increased $61 million, or 17%, which included the contributions from the acquisitions last year of Oil Price Information Service (OPIS) and Chemical Market Analytics (CMA), the latter of which was previously known as IHS Markit Base Chemicals. Circulation revenue at Dow Jones grew 3%, reflecting ongoing growth in digital-only subscriptions, primarily at the Wall Street Journal, the company said. Digital-only subscriptions to the Journal rose 9%, to 3.17 million; total subscriptions were up 4% to 3.78 million.
The results for the December 2022 quarter, which was News Corp’s Q2 of fiscal year 2023, also included $6 million in one-time costs related to professional fees incurred by the special committee and the company to evaluate the proposal from the Murdoch family to merge News Corp and Fox Corp. The Murdochs withdrew the proposal last month.