Murdoch Hints at Job Cuts After News Corp Records $6.4bn Loss
Media group reports 42% fall in operating income for three months to December
News Corporation slumped to a $6.4bn (£4.37bn) loss in the last three months of last year, marking what Rupert Murdoch, the company's chairman and chief executive, last night called "a direct reflection of the grim economic climate".
The heavy losses incurred for the three months ended in December reflected the media conglomerate's decision to write down $8.4bn of its assets – including those of Dow Jones, the American news and financial information company it acquired in 2007 for $5.6bn.
But with the recession biting into advertising revenue, the company's many outlets failed to buck the downturn and Murdoch raised the prospects of further job losses.
"While we anticipated a weakening, the downturn is more severe and likely longer lasting than previously thought," he 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. We are implementing rigorous cost-cutting across all operations and reducing head count where appropriate."
The company reported operating income for the quarter ending December 31st of $818m – down 42% from this time last year. This left net income for the quarter excluding impairment charges at $320m, down from $832m a year ago.
News Corp's empire spreads around the world but is almost entirely centered on the media industry.
In Britain, its media holdings include the Sun and Times newspapers and Sky television, and in the United States it has the Wall Street Journal, the Fox television network, movie studio 20th Century Fox and the social networking website MySpace. Only the company's magazine businesses bucked the trend, posting a slight increase in income compared with the same time last year.
The heavy losses incurred for the three months ended in December reflected the media conglomerate's decision to write down $8.4bn of its assets – including those of Dow Jones, the American news and financial information company it acquired in 2007 for $5.6bn.
But with the recession biting into advertising revenue, the company's many outlets failed to buck the downturn and Murdoch raised the prospects of further job losses.
"While we anticipated a weakening, the downturn is more severe and likely longer lasting than previously thought," he 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. We are implementing rigorous cost-cutting across all operations and reducing head count where appropriate."
The company reported operating income for the quarter ending December 31st of $818m – down 42% from this time last year. This left net income for the quarter excluding impairment charges at $320m, down from $832m a year ago.
News Corp's empire spreads around the world but is almost entirely centered on the media industry.
In Britain, its media holdings include the Sun and Times newspapers and Sky television, and in the United States it has the Wall Street Journal, the Fox television network, movie studio 20th Century Fox and the social networking website MySpace. Only the company's magazine businesses bucked the trend, posting a slight increase in income compared with the same time last year.
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