News Corp Australia has revealed it will slash $40m in operational costs after chairman Nick Miller detailed plans to cut expenses by the end of the financial year.
The group’s first quarter financial results logged an 11 per cent plunge in local advertising sales, forcing the group to look elsewhere for revenue and shrink its costs by the end of 2017.
In a staff email, Miller described News Corp’s vision moving forward to involve ‘closing positions that are not absolutely critical’ due to challenges in print, and confirmed the likelihood of redundancies following the media giant’s operational clean-up.
“To offset these challenges, we will need to implement a series of cost initiatives across the business. This will allow us to continue our commitment to journalism in print and digital while enhancing our focus on digital innovation and improvement," says Miller.
In the short term, this will begin with an immediate review of all vacant positions with the aim of closing positions that are not absolutely critical. We will also introduce new business rules in relation to travel and entertainment costs.”
Miller also told staff News Corp’s financial restructure follows the footsteps of fellow publishers who have employed ruthless cost-saving tactics to mitigate against print losses.
“In the same way that other publishers are addressing the shifting market dynamic, we too must examine how we best produce and distribute quality content for our audiences, and our advertisers,” he says.
News Corp’s cost-cutting objective is anticipated to be met through an increased focus on digital channels. The redundancies are also expected to be targeted at the group’s long-suffering printed newspaper division.
Its total global revenue hit just under $US2bn at $US1.9bn billion for the three months ended September 30, compared to $US2.01bn in the prior period.
The Murdoch-owned giant’s mastheads in Australia include The Australian, The Daily Telegraph and The Herald Sun.
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