Feb 9 (Reuters) – Media conglomerate News Corp (NWSA.O) said on Thursday that it would cut 1,250 jobs after it missed estimates for second-quarter earnings due to weakness in its news and digital real estate businesses.
Rising inflation and higher interest rates are forcing companies to curb their ad and marketing spend, denting one of the major sources of revenue for companies such as News Corp, which has major publishing platforms including 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.
“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 added.
Shares of the company fell 1.4% in extended trading after its first quarterly report since Rupert Murdoch’s decision to withdraw a proposal to reunite the owner of Dow Jones and Fox Corp (FOXA.O), which is led by his son Lachlan Murdoch.
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Advertising revenue fell 10.6% to $464 million during the quarter.
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.
Reporting by Chavi Mehta in Bengaluru; Editing by Anil D’Silva
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