News Corp (NASDAQ:NWS) said it will be reducing its headcount by 5% or 1,250 jobs as a slowdown in advertising spend by businesses due to rising interest rates and high inflation dented the media conglomerate’s fiscal second quarter 2023 earnings.
Shares of News Corp (NASDAQ:NWS), which owns publications such as The Wall Street Journal, the New York Post, and The Australian, were trading down 9% at about US$18.97 shortly after the stock market opened on Friday.
In a statement accompanying its results, News Corp CEO Robert Thomson noted that, obviously, a surge in interest rates and acute inflation had a tangible impact on all of its businesses during the quarter.
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“Just as our company passed the stress test of the pandemic with record profits, the 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,” Thomson said.
For the three months ended December 31, 2022, the company posted total revenue of $2.52 billion, down 7% from $2.72 billion in the year-ago quarter and below the Street’s expectation of $2.55 billion.
The company attributed the decline to a 6% negative impact from foreign currency fluctuations, lower revenues in the Book Publishing segment due to lower book sales, and lower revenues in the Digital Real Estate Services segment due to challenging housing market conditions in Australia and the United States.
The decline was partially offset by higher Dow Jones segment revenues and higher Subscription Video Services revenues.
Net income took a 64% hit, coming in at $94 million compared to $262 million in the same quarter in the previous year.
Adjusted earnings per share were $0.14, below the market expectation of $0.19 and a significant decrease from earnings per share of $0.44 in 2Q fiscal 2022.
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