Murdoch to cut jobs at UK and Australian newspapers

by Staff, Brand Republic 06-Nov-08, 09:30

NEW YORK - Rupert Murdoch has said there will be "across the board" job cuts at News Corporation's UK and Australian newspapers after slashing the company's profits forecast as growth slowed including digital growth, which has almost halved.

News Corporation shares have lost 20% of their value after the company cut its 2009 profit forecast from a single-digit increase on the $5.13bn operating profit it made last year to a double-digit decrease.

Murdoch said: "The revised guidance is a clear reflection of the current economic downturn which we believe will persist throughout fiscal 2009, proving extremely challenging to the media sector."

In regular trading on the Australian stock exchange News Corp shares fell 21.4% to AUS $12.50 after the company's first quarter results were published.

Before the results came out News Corp shares on the New York stock exchange fell 10% to $9.79, then another 12.2% to $8.60.

News Corp revealed a picture of falling revenues at its US television stations and UK and Australian newspaper businesses, compounded by disadvantageous currency movements due to its international profile.

According to Bloomberg and the Daily Telegraph Murdoch said there will be "across the board" job cuts at News Corp's UK and Australian newspapers, which include the Sun and The Times in the UK and The Australian, the Herald Sun in Melbourne and The Courier-Mail in Brisbane down under.

Murdoch said: "You will see even leaner operations in both those places.

"I am not prepared to say how many people. I know, but I don't want the headlines about it."

News International's UK newspapers are already understood to be reducing their commercial staff by 100 to 350 by unifying their sales teams.

Murdoch also said he planned to close 10 of the Wall Street Journal's 17 printing plants.

Revenue growth at News Corp's online operations including MySpace, which had been forecast to grow 30%, slowed to 17% for the three months to September 30.

The group's post-tax profit fell 30% to $515m (£322.2m), with the television division, which includes Fox in the US and Star in Asia, suffering a massive drop in operating income from $183m to $54m.

The best performing division was Sky Italia, which grew operating income from $48m to $165m.

Comments

Greg Tingle - 08/11/2008

It was Rupert Murdoch himself who said that, 'Big will not beat small anymore, it will be the fast beating the slow'. Murdoch appears to be acting fast here. Also for consideration in this turn of events, Charles Darwin said, 'In the long history of humankind \(and animal kind, too) those who learned to collaborate and improvise most effectively have prevailed'. Could Murdoch be getting ready for more partners to adapt to the current media landscape? I doubt it would be Richard Branson's Virgin Media, and it can't be James Packer, after his opting out of the TV business with Network Nine Australia. As usual, Murdoch, Branson, Packer and a few others know a few things we don't know, and that's why we're watching and writing about them. I'd love to know what Barack Obama and Rupert Murdoch have spoken about recently. Murdoch did some ground breaking journalism work decades ago with his coverage of the Max Stuart trial. In 2002 Murdoch financed the film, 'Black and White'. Seems Obama has provided more good history making fodder for the likes of News Limited to write about, as we all adapt to changes in the media landscape, and the world at large.