Dow Jones Plans to Restructure Amid Volatile Ad Market
October 18 2016 - 9:50PM
Dow Jones News
Executives with Dow Jones & Co., the unit of News Corp that
includes The Wall Street Journal, have told the union representing
its employees that it is preparing to restructure operations amid
volatility in the ad market.
The Independent Association of Publishers' Employees, which has
been engaged in contract talks with the company since the summer,
said Dow Jones' negotiators on Tuesday backtracked on certain
proposals in its latest offer, blaming business conditions.
The union said it was told to "expect a company restructuring
announcement soon," although it said executives offered no
specifics.
"Management, we were told, is looking at the company's cost
base, the business as a whole and how it can proceed in the current
business environment," the union said in a memo to employees it
represents.
It is unclear what form the restructuring would take as a
decision hasn't yet been announced. But it could include a
reduction of head count across Dow Jones, according to people
familiar with the matter.
The company has also been exploring a range of other options to
reduce costs, including possibly combining or eliminating sections
within the Journal, cutting the number of newspaper pages and
closing or reducing noncore projects, the people said.
A spokeswoman for Dow Jones declined to comment.
The review comes amid a turbulent period for traditional
publishers with a sharp decline in print advertising revenue this
year and pressures in the digital ad market.
In the June quarter, News Corp reported a 5% decline in
advertising revenue across its news and information services unit,
which includes all of the company's newspapers in the U.S., U.K.
and Australia. At the Journal, domestic advertising revenue fell
12%, according to News Corp Chief Financial Officer Bedi Singh.
According to the union, Dow Jones executives said there is no
evidence that volatility in the advertising sales market will
improve.
The union, which represents about 1,300 of Dow Jones' employees,
has been operating without a contract since Oct. 1.
A main sticking point in negotiations has been wage increases,
the union said. The company has offered a 2% increase each year for
three years, according to the union.
The union said Dow Jones had postponed the last two negotiating
sessions and then walked back parts of its offer at the meeting on
Tuesday, including now requesting an option to terminate the
proposed three-year contract for either the second or third year
because business conditions required the need for flexibility. The
union also said the company wants the new contract to go into
effect the day it is ratified, as opposed to making any pay
increase retroactive to the expiration of the prior contract.
Write to Lukas I. Alpert at lukas.alpert@wsj.com and Suzanne
Vranica at suzanne.vranica@wsj.com
(END) Dow Jones Newswires
October 18, 2016 21:35 ET (01:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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