Due to the weakening global economy, several media and technology organizations have recently made layoffs. Adding to the trend, News Corp is thinking of eliminating 1,250 jobs, or around 5% of its current staff.
News Corp announced that it would eliminate 5%, or 1,250 positions, of its staff after the media giant missed Wall Street sales and profit projections for the most recent quarter, affected by reductions in all of its divisions, including news.
The cause of layoffs in News Corp.
The major sources of income for conglomerates like News Corp, which owns major publishing platforms like the New York Post and the Wall Street Journal in the US as well as the Times and the Sun in the UK, have been hurt by companies being forced to cut back on marketing and advertising spending due to higher interest rates and rising inflation. In a statement, Chief Executive Robert Thomson stated that “a jump in interest rates and sharp inflation had a noticeable impact on all of our companies.” In late trade, firm shares fell by over 3%.
Thomson stated that several steps, including job layoffs, were being implemented to tackle the slowdown. All firms will be affected by the layoffs, which would provide yearly savings of at least $130 million. The business stated that it anticipates one-time expenses in the third quarter as a result of the withdrawn Fox-News Corp deal and its earlier disclosed exploration of a sale of Move Inc, the company that manages Realtor.com, to CoStar Group.
The WSJ (Wall Street Journal) is part of the Dow Jones division, which reported an 11% increase in quarterly revenues to $563 million, driven mostly by its professional information segment. For the first time, the number of subscribers to WSJ and Barron’s Group reached 5 million. Earnings, however, decreased by 3% from the previous year to $139 million.
The second quarter’s advertising revenue for News Corp dropped 10.6% to $464 million. Fox’s advertising income increased by 4% in the December quarter as a result of the World Cup and the U.S. midterm elections. According to Refinitiv statistics, total revenue for the second quarter that ended December 31 was $2.52 billion compared to analysts’ expectations of $2.55 billion on average. Analysts had predicted 19 cents in adjusted earnings per share, but instead, they got 14 cents.
The cancellation of the proposed merger.
The business also said that its ambitions to combine with Fox Corp., which News Corp Executive Chairman and Fox Co-Chairman Rupert Murdoch abandoned in January, resulted in one-time charges of $6 million. It was found that at the moment, a combination would not benefit the shareholders of either company the most. The idea was abandoned at the same time that News Corp. was in advanced negotiations to sell CoStar Group, a commercial real estate firm, an interest in Move Inc., the parent company of Realtor.com.
Robert Thomson, the CEO of News Corp., assured staff members that the cancellation of the merger would not have any effect on them at the time it was announced. However, it now appears that his words and deeds are not coordinated.
Shareholders opposed the proposed merger because they didn’t think a combination would reveal the full worth of News Corp. if combined with Fox. Among other shareholders, Independent Franchise Partners believed that a separation of the business rather than a merger would have allowed News Corp to realize its full potential worth.
Another stakeholder that opposed the planned merger was Irenic Capital Management, who said that Fox didn’t support News Corp’s strategic objectives. Independent Franchise and Irenic believe that the shares of News Corp. are undervalued.
Was the proposed merger may result fruitful in the future?
Murdoch’s company would gain a more unified leadership structure and cost savings by merging the two companies at a time when viewership for print and TV media is dropping. Dow Jones, the owner of the Wall Street Journal, is owned by News Corp. Fox, which was left behind when Twenty-First Century Fox was sold to Disney for $71.3 billion in 2019, controls the right-wing networks Fox News and Fox Business, a rival to CNBC.
The idea behind the merger at the time would have been to simply give the combined business more size so it could compete in a market where media businesses are vying for viewers and digital advertising dollars.
The final words of hope.
Both suspended or dismissed workers and those who escape downsizing or staff layoffs may suffer grave consequences. Astonishment, fury, distrust, skepticism, frustration, and flight are all possible reactions from fired employees. There may be protests and confrontations if staff layoffs are not handled properly and effectively. Employees must take on more tasks and establish new working relationships as a result of the layoff, which can be stressful. Fearful workers are more likely to be less efficient. Hope this layoff spree ends soon.
edited and proofread by nikita sharma
