Rising inflation and higher interest rates are forcing companies to curb spending on advertising and marketing, denting one of the major sources of revenue for companies such as News Corp, which has publishing platforms including the Wall Street Journal.
"A surge in interest rates and acute inflation had a tangible impact on all of our businesses," Chief Executive Robert Thomson said in a statement. To combat the slowdown, Thomson said there were a number of initiatives underway, including the job cuts. The layoffs will be made across all businesses and result in 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 The company said that in the third quarter it expects to see one-time costs related to the withdrawn Fox-News Corp proposal and its previously announced exploration of a sale of Move Inc, which operates the Realtor.com website, to CoStar Group.
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 in the second quarter ended Dec. 31, while analysts on average expected $2.55 billion, according to Refinitiv data. Adjusted earnings per share were 14 cents, while analysts were expecting 19 cents. (Reporting by Chavi Mehta in Bengaluru, Helen Coster in New York and Dawn Chmielewski in Los Angeles; Editing by Anil D'Silva and Anna Driver)
