News Corp announces $40m cuts in Australia; redundancies to follow
News Corp Australia will seek to make $40m in cuts from its Australian operation as advertising continues to shrink.
At News Australia advertising revenues for the quarter declined 7%, or approximately 11% in local currency, and the company announced during its earnings call today that a current cost reduction program would be extended.
Bedi Singh announced $40m in cuts at News Corp Australia
Chief financial officer, Bedi Singh, told analysts the cuts would be made over coming months.
“While we continue to benefit from the cost reduction program that News Australia announced in the second half of 2016 – which totalled around 5% of the cost base – we are now embarking on further cost initiatives,” Singh said.
“We expect an additional $AU40m in cost savings this fiscal year while we continue to push digital initiatives more broadly.
CEO Robert Thompson said there was unpredictability in the ad market, particularly where advertising was being placed on sites with little or no value.
“What we are seeing at the moment is some mayhem in the ad market,” Thompson said.
“Advertisers are having ads placed on sites which seem to have almost contempt for for profit companies.”
A spokesperson for News said the company was moving to deal with challenges faced by the broader publishing industry.
“While these results reflect the strength of our digital real estate business and higher digital revenues, they also show that our business, like other publishers globally, is experiencing some challenges, particularly in print advertising,” the spokesperson said.
“In order to offset those challenges, we will introduce a series of cost initiatives across the business which will allow us to continue our commitment to journalism in print and digital while focussing on opportunities for digital innovation and improvement.
“This is about working harder and smarter and moving resources into areas where they will deliver the most value.”
News also revealed that the decision to close streaming service Presto in the new year had forced Foxtel into the red for the first quarter of the new financial year.
“Advertisers are having ads placed on sites which seem to have almost contempt for for profit companies.”
What the fuck does that mean?
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“Continue our commitment to journalism in print and digital ….”
Sure, and make $40m worth of cuts …. what a lot of bulls..t.
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This is actually a small number. The bulk of the print business cost reduction happens when pages printed shrink. Need has also cut back hard on the volume it ships. So this cut will start the process of carving into the base. I’m willing to bet they don’t touch the oz as they hope to be the last guy standing versus Fairfax, which appears bent on failing all of its once iconic brands.
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I would like to know what that means too.
Anybody know?
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It’s not easy to spend your advertising dollars with News Corp. We tried. When we filled out the ‘request callback’ form on the Newscorp website, it took three days for someone from the editorial team (not sales) to respond. That person had no idea what to do, and only after some gentle nudging on our part did they refer us to someone from the sales team. The person from the sales team apparently wasn’t experienced enough to help with our query, because they then had to pass it onto their manager.
News Corp, we’ve moved on, but our money is still good if you can get your act together.
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I bet a print distribution deal will happen with fairfax? In Melbourne? Whats your thoughts?
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The OZ has been Rupert’s “love child” for 30 years and has bled the other News Corp mastheads dry … it sells less than 100,000 nationally and has poor readership. Yet, Oz journos and m’ment appear to be untouchable.
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Declining revenues equals cost cutting equals redundancy equals organisational incapability equals declining revenue equals…..WTF, working at News Corp is just like being a rodent on a running wheel!
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Have you visited Junkee.com lately?
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Hi An Advertiser,
I’m disappointed to hear you weren’t looked after when you enquired with us. If you’d be willing to email me at nsw.ds.campaigns@news.com.au, I’ll make sure that doesn’t happen again.
Hope to hear frrom you
Stephen
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This comment was not written by me. Christian Frost
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