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Rupert Murdoch's News Corp has flagged job cuts after reporting a US$5.9 billion ($11.5 billion) first half net loss amid a "grim economic climate".
The media group also on Friday posted a US$6.417 billion net loss for the second quarter, with the impact of the global financial crisis
and a massive writedown dragging its result into the red.
Murdoch, News Corp's chairman and chief executive, said the results reflected the tough economic times.
"Our results for the quarter are a direct reflection of the grim economic climate," Murdoch said in a statement.
Murdoch said News Corp would deal with the tough times by cutting costs and axing jobs.
"While we anticipated a weakening, the downturn is more severe and likely longer-lasting than previously thought," Murdoch 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."
News Corp's US$5.902 billion first half net loss compared to a US$1.564 billion net profit in the first six months of 2007-08.
It posted a second quarter net profit of US$832 million last year.
The international news and entertainment giant incurred an operating loss of US$6.673 billion for the six months to December 31, 2008, down from operating income of US$2.465 billion in the previous corresponding period.
The first half result was hurt by an US$8.4 billion pre-tax non-cash impairment charge in the second quarter.
The charge related to writedowns including a US$185 million writedown on newspapers and information services.
News Corp said its Australian newspapers were hit in the second quarter.
"The Australian newspaper group reported 18 per cent lower second quarter operating income in local currency terms versus the second quarter of fiscal 2008, primarily due to lower classified advertising revenues resulting from declines in the employment and auto sectors and higher costs associated with pension expenses and head count reductions," News Corp said.
"Overall, advertising revenues were down 4 per cent as compared to a year ago. Circulation revenues were in line with the second quarter of the prior year."
The company told analysts that its 2008-09 operating income was expected to be 30 per cent lower than the previous year's US$5.13 billion result.
There had been a weakening in all News Corp's advertising driven businesses, including newspapers, TV and its cable networks, the company said.
A weakening of discretionary spending had also hurt News Corp's DVD and book sales.
Murdoch said News Corp was well positioned to withstand a lengthy downturn and emerge stronger when the economic situation improved.
"Historically, every time we've seen a recession, mild or major, we've endured this panic and come out better," he told analysts.
"Every time the economy rebounds, advertising comes back, usually stronger than before.
"I'm not being flippant. I recognise that we may never return to record levels. But we do believe we can recapture a large per cent of the advertising that does return.
"When this recession ends, we'll be better positioned than anyone else because we've been aggressively building market share in these businesses, and we will make no compromise in that sector."
News Corp's first half revenue fell to US$15.38 billion from US$15.657 billion previously, and was down to US$7.87 billion in the second quarter from US$8.59 billion in the prior corresponding period.
- AAP
