News Corp is going through tough times. The Murdoch company has announced poor financial results with revenues down 7 per cent and net income down by more than two-thirds year-on-year.
The solution? Cutting 1,250 jobs around the world and slashing staff perks.
In an email to staff, Michael Murphy, News Corp Australia’s chief financial officer, said that the organisation had seen a “steady increase in discretionary expenses” and it was expecting staff to make “difficult choices.”
Phone plans have been capped at $21.50 per month. When travelling, staff will only be allowed to fly economy and “preferred hotels” have to be used. Heading overseas? Staff will need to get the trip signed off by the CFO. Gifts for weddings, retirements, deaths, and other big life events cannot cost more than $100.
However, it seems unlikely that this policy will extend to the Murdoch family inner circle and Fox Sports’ roster of ex-pros.
Of course, News Corp’s poor financial results and cost-cutting isn’t entirely its own fault. Rate rises and inflation are hitting the company hard, with many Aussie consumers looking to pull back spending.
News Corp’s global chief exec, Robert Thomson, said that the challenges the business faces are “more ephemeral than eternal.”
“Jus as our company passed the stress-test of the pandemic with record profits, the initiatives now underway, including an expected 5 percent headcount reduction, or around 1,250 positions this calendar year, will create a robust platform for future growth,” he added.
News Corp is also looking to offload real estate listing business Move and is discussing a potential sale to the CoStar Group. “Any transaction would be designed to create shareholder value and
strengthen Realtor.com’s competitive position,” said Thomson.
Amidst the gloom, there were some positives for News Corp. Foxtel’s Kayo and BINGE streaming services brought in higher revenues. Plus, bucking the trend for Australian papers, The Sun in the UK saw strong digital advertising revenue growth and had a successful expansion in the US.
What will bite more for the business is that the net income per share for stockholders was down to US$0.12 from US$0.40 in 2021.
