News Corp is planning to slash another $40 million in costs from its Australian publishing operation before the end of the financial year after a further slump in advertising revenue.
News Corp’s global first quarter financial results announced on Tuesday revealed a 2.4 per cent fall in revenue and 11 per cent fall in ad revenues.
Robert Thomson, News Corp global CEO, said print advertising challenges were partially offset by digital gains and cost-cutting initiatives. “We continue to push digital while we invest in high quality, premium content balanced with ongoing cost cutting measures."
News Corp CFO Bedi Singh told investors that while the Australian business was benefiting from current cost cutting programs, there was still more to be done.
In an email to local staff on Wednesday, News Corp Australia chairman Michael Miller said the results showed the strength of its digital real estate businesses and its push for digital news revenue. However, he said challenges remain, particularly in print.
To offset those challenges, we will need to implement a series of cost initiatives across the business. This will allow us to continue our commitment to journalism in print and digital while enhancing our focus on digital innovation and improvement. In the same way that other publishers are addressing the shifting market dynamic, we too have to examine how we best produce and distribute quality content for our audiences, and our advertisers.
Miller said News Corp Australia would look at resourcing, processes and products, and that the cost cutting would include the possibility of redundancies.
In the short term, this will begin with an immediate review of all vacant positions with the aim of closing positions that are not absolutely critical. We will also introduce new business rules in relation to travel and entertainment costs. In the mid-term, we will consider changes to our business to ensure we work harder and smarter and move resources into areas which will deliver the most value to the business. In shaping more efficient structures, there is the possibility of a redundancy program.
The journalists' union called on News Corp to guarantee there will be no forced redundancies.
“It is particularly frustrating that the announcement of the redundancies came within hours of voting opening for a new enterprise bargaining agreement negotiated between News Corp and MEAA members over many months; with the company’s management never once indicating that further job losses and cost savings measures were imminent,” said a statement from the Media Entertainment and Arts Alliance (MEAA).
“News Corp editorial staff have made enormous sacrifices in cooperative effort to improve efficiencies and productivity in the business. Far too often these sacrifices have been made with little or no recognition or recompense from management. MEAA calls on the company to provide assurances that any redundancies will be on a voluntary basis.”
Miller said staff would be kept informed of the changes as the cost initiatives move forward.
As we embark on this program, I assure you everything will be done to minimise the disruption to our people and our business.
News Corp's Australian capital city publications include The Australian, The Daily Telegraph, Herald Sun, The Courier Mail, The Advertiser and The Mercury.