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.

News CorpAt 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.


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