© Reuters. FILE PHOTO: A passerby stands in front of the News Corporation building in New York June 28, 2012. REUTERS/Keith Bedford/File Photo
By Chavi Mehta, Helen Coster, and Dawn Chmielewski
(Reuters) – News Corp said on Thursday it would cut 5% of its workforce, or 1,250 jobs, after the media conglomerate missed Wall Street’s quarterly estimates, hit by declines in its businesses, including news.
The company also said it incurred $6 million in one-time costs associated with its merger with Fox Corp, plans that News Corp (NASDAQ:) CEO and Fox co-chairman Rupert Murdoch scrapped in January.
Rising inflation and higher interest rates are forcing companies to cut advertising and marketing spending, putting a dent in one of the main sources of revenue for companies like News Corp, which has publishing platforms like the Wall Street Journal.
“An increase in interest rates and sharp inflation had a tangible impact on all of our businesses,” Chief Executive Robert Thomson said in a statement.
To combat the slowdown, Thomson said a number of initiatives were underway, including job cuts. The layoffs will be made across all companies and will generate savings of at least $130 million on an annualized basis.
The company said that in the third quarter it expects to see one-time costs related to Fox-News Corp’s withdrawn proposal and its previously announced exploration of a sale of Move Inc, which operates website Realtor.com, to CoStar Group (NASDAQ:).
Shares of the company fell 1.4% in extended trading.
Advertising revenue in the second quarter fell 10.6% to $464 million during the quarter.
Revenue was $2.52 billion for the second quarter ended Dec. 31, while analysts had expected $2.55 billion on average, according to Refinitiv data.
Adjusted earnings per share were 14 cents, while analysts had expected 19 cents.