The past several years have been exceedingly difficult for several businesses, but perhaps none have had quite as rocky of a period as the entertainment industry at large. From the pandemic-related lockdowns of earlier this decade to the WGA and SAG strikes of 2023 to the increasing evolution of how modern audiences consume content, everyone from filmmakers to media outlet writers is grappling with a drastically changing landscape. Despite all this, News Corp, the parent company of once prestigious media outlets such as the Wall Street Journal and Dow Jones, has announced that they will be commencing mass layoffs. Ultimately, this will reduce the company’s employee count by five percent, eliminating over 1,200 jobs.
As for the reason, New Corp CEO Robert James Thomson simply said that the “obvious global challenges” were a key part of the decision-making process. News Corp remains a giant within the media and publishing industries, but it seems to be struggling even in this new era of entertainment, journalism, and media.
Executive chairman Rupert Murdoch stated that the job cuts would occur within the calendar year of 2024 and seem to be indisputably linked to the fact that News Corp’s earnings will be down substantially from the previous quarter. As quantified on December 31, 2023, News Corp’s revenue decreased by seven percent, bringing it down to $2.52 billion. Comparatively, the company’s net income fell a massive sixty-four percent, bringing it down to $94 million.
As Robert Thomson elaborates, “Obviously, a surge in interest rates and acute inflation had a tangible impact on all of our businesses.” When pressed about the logic behind the job cuts, terminations, and layoffs, Thomson simply stated that the initiatives were being enacted in the interest of conserving the company’s resources for the time being to better prepare it for future success. Thomson noted that the initiatives “now underway, including an expected 5% headcount reduction, or around 1,250 positions this calendar year, will create a robust platform for future growth.”
News Corp’s overall earnings before interest, taxes, depreciation, and amortization (EBITDA) dropped 30% to $409 million. Representatives from News Corp, including Thomson, attributed the overall decline as being mostly due to the higher costs of its Dow Jones segment and the increased operating expenses in its News Media (including the News Corp Australia and News UK divisions) and acknowledge that this is partly due to inflation-related stressors and pressures being imposed upon the industry.
In conjunction with this lower revenue, which the company attributes to inflation both stateside and internationally, there was also a negative impact of $30 million from foreign currency fluctuations alone. Overall, the company’s ad revenue was down eleven percent year-over-year, dropping to $464 million.
News Corp is still a titan within the industry, but even titans have to tighten their purse strings when facing hard financial times. By making these massive layoffs, News Corp is looking to alleviate some financial pressures in these unprecedented times.
