News Corp Australia Plans to Restructure, Anticipates 100 Staff Layoffs
The Australian arm of the international media giant is striving to save $65 million as it navigates a declining advertising market.
News Corp, a multinational publisher, has announced a comprehensive restructuring plan aimed at reducing operating costs by $65 million (US$43 million) in its Australian operations, potentially resulting in the shedding of up to 100 staff.
The company’s business will now consist of three units: free mastheads, subscription-based tabloid newspapers, and “prestige titles” such as The Australian newspaper, Vogue magazine, The Weekend Australian Magazine, and other Condé Nast titles.
This marks the second round of cuts in as many years, following a $160 million cost reduction in response to decreasing ad revenues in the first half of 2023.
Recent financial reports show a 1% decline in revenue to US$2.42 billion for the quarter ended March 31, with a 40% decrease in net profit to $30 million.
Advertising revenue also decreased by 8.9% to US$358 million, with most segments experiencing revenue declines except for Dow Jones and the digital real estate services group.
The latest changes involve the abolition of the previous state-based structure, centralization of decision-making at the national level, and the removal of several senior editors, including Lisa Muxworthy, editor-in-chief of news.com.au, and John McGourty, group director of the Editorial Innovation Centre.
PwC Advised on the Restructure
The restructuring plan, advised by PwC, will be implemented in the second half of June due to anticipated reductions in ad revenues resulting from Meta’s cancellation of deals with publishers under the News Media Bargaining Code.
News Corp’s Australian operations experienced a 10% revenue decrease in the March quarter, primarily due to lower print and digital advertising income despite an uptick in digital subscribers.
News Corp’s Executive Chairman, Michael Miller, communicated the decision to staff via email, acknowledging that some roles will change and that some employees will unfortunately be leaving the company.
“As we are now living at a time when the way news and information is created and consumed is changing faster than it has ever changed, we too must continue to evolve,” Miller stated.
The Media Arts and Entertainment Alliance confirmed that unionized News Corp Australia staff accepted a 12-month extension to their enterprise bargaining agreement, inclusive of a 3.5% pay rise, with redundancy payments capped at $399,500.
Nevertheless, the longevity of these roles remains uncertain as News Corp explores the potential of utilizing AI-generated content to reduce costs.
These changes were announced following a budget meeting at the company’s headquarters in Sydney, attended by prominent figures like Rebekah Brooks, Robert Thomson, and Lachlan Murdoch, who assumed the chairman role from Rupert Murdoch in the previous year.
