Multinational publisher News Corp has today announced a far-reaching restructuring plan that could see as many as 100 staff shed from its Australian operations as it tries to save $65 million (US$43 million) in operating costs.
The business will now comprise three units: free mastheads, subscription-based tabloid newspapers, and what it’s calling “prestige titles”: The Australian newspaper, Vogue magazine, The Weekend Australian Magazine, and other Condé Nast titles.
This is the second round of cuts in as many years. In the first six months of 2023, News Corp slashed costs by US$160 million in response to falling ad revenues.
The company recently announced revenue had fallen 1 percent to US$2.42 billion in the quarter ended March 31, while net profit declined by 40 percent to $30 million.
Its advertising revenue shrank by 8.9 percent to US$358 million. Most of the company’s segments posted revenue declines, except for Dow Jones and the digital real estate services group.
The latest changes abolish the previous state-based structure, centralising decision-making along national lines, and dis-establishes the positions of several senior editors including Lisa Muxworthy, the editor-in-chief of Australian website news.com.au, and John McGourty, the group director of the Editorial Innovation Centre.
PwC Advised on the Restructure
The changes have been made on the advice of PwC and will begin being implemented in the second half of June. They have been prompted by a reduction in ad revenues anticipated as a result of Meta arbitrarily cancelling its deals with publishers under the News Media Bargaining Code.Revenue across News Corp’s Australian operations fell by 10 percent in the March quarter, with lower print and digital advertising income occurring despite an increase in the number of digital subscribers.
News Corp Executive Chairman Michael Miller outlined the decision in an email to staff: “A number of roles will change, and some impacted people will regrettably leave our business,” he said.“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.
“This strategy has diversified our revenue by growing consumer subscriptions and expanded our relationships with commercial clients with new digital and owned media products while staying committed to great journalism and championing the causes Australians care about.”
The Media Arts and Entertainment Alliance said unionised staff at News Corp Australia had accepted a 12-month extension to their enterprise bargaining agreement and will receive a pay rise of 3.5 percent, contingent on redundancy payments being capped at $399,500.
However, just how long those jobs will remain is open to question, as News Corp has said that it sees expanding the use of AI-produced content as a viable way to save costs.
Today’s changes followed a budget meeting at the company’s Holt Street headquarters in Sydney last week, attended by News UK boss Rebekah Brooks, global chief executive Robert Thomson, and chairman Lachlan Murdoch, who took over from Rupert Murdoch last year.
