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News. Corp cuts jobs after huge quarterly loss
2009-02-05
NEW YORK (AFP) - News Corp. reported a huge quarterly loss on Thursday and chairman Rupert Murdoch, citing a "grim economic climate," began cutting jobs at his sprawling media empire. News Corp. reported a 6.41 billion dollar loss in the second quarter of its fiscal year compared with an 832 million dollar net profit in the corresponding quarter a year ago. News Corp.'s results for the quarter were impacted by 8.4 billion dollars in one-time charges, including a writedown in the value of Dow Jones, owner of The Wall Street Journal, and US broadcast licenses. "Our results for the quarter are a direct reflection of the grim economic climate," Murdoch said in a statement. "While we anticipated a weakening, the downturn is more severe and likely longer lasting than previously thought," the News Corp. chairman and chief executive said. "As a result, we have been taking actions to preserve a solid level of operational profitability and a strong balance sheet without sacrificing future growth," he said. "We are implementing rigorous cost-cutting across all operations and reducing head count where appropriate," Murdoch added. "We believe our businesses are well positioned to withstand a lengthy downturn and to emerge stronger as the current economic situation improves." News Corp. reported adjusted operating income of 818 million dollars, a drop of 42 percent from the same quarter a year ago, and earnings per share of 12 cents, well below analysts' expectations of 19 cents. Revenue dipped 8.4 percent in the quarter which ended on December 31 to 7.87 billion dollars. In a conference call with analysts and reporters, News Corp. executives said they expected a 30 percent drop in operating income for the full fiscal year. Wall Street Journal publisher Robert Thomson told employees of the newspaper purchased by Murdoch two years ago that 14 jobs were being cut in addition to 11 positions lost recently through attrition, "A precipitous decline in print advertising revenue has forced a close examination of our structures and of our costs," Thomson said in an email obtained by AFP. Thomson said the job cuts would affect reporters in Boston, Los Angeles and New York. He said there were no plans for layoffs at Dow Jones Newswires. News Corp. also said that an unspecified number of positions were being cut at the Fox television network. Besides Dow Jones, the Wall Street Journal and Fox, News Corp. owns the 20th Century Fox movie studio, the STAR and SKY television networks, social network MySpace, book publisher HarperCollins and newspapers in Australia, Britain and the United States. News Corp. is the second media giant to report huge losses this week. Time Warner said Wednesday it lost 16.03 billion dollars in the final three months of 2008 after taking a writedown of 25 billion dollars to reflect the declining value of Internet arm AOL and cable and publishing operations. In after-hours electronic trading after the release of its results, News Corp.'s share price lost 3.46 percent to 6.70 dollars.
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