Dow Jones warns union employees of forthcoming ‘restructuring’ announcement
Union negotiating a new three year contract with the newspaper publisher said the company had ‘backtracked’ on its previous proposal, blaming ‘volatility in the advertising-sales market’
The union representing employees at Dow Jones, which includes The Wall Street Journal, has been told to expect an announcement soon regarding a restructuring of operations. In other words, layoffs. Dow Jones is a unit of News Corp, the publishing company spun off when publishing and broadcast was separated, with the broadcast side becoming 21st Century Fox, and publishing retaining the News Corp name.
“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 Independent Association of Publishers’ Employees told employees in a memo.
The union has been in negotiations with the publisher and yesterday told its members that the company had recently had a new proposal “that backtracks from its previous position.”
“We have reached a real crossroads moment in these contract negotiations with Dow Jones,” the union said.
The new proposal would give employees a 2 percent raise, but not guarantee that raise for the second and third year of the contract. The union said they were told the change in negotiating position was necessitated by business conditions brought on by “volatility in the advertising-sales market.”
“These claims contradict the cheery public statements that CEO Will Lewis has traveled the world to make,” the union said in its note to members. “Indeed, the public behavior of company parent News Corp has suggested it has more cash than it knows what to do with, flying Will and other top executives first class, doling out a 10% ($1 million+) raise to Robert Thomson and a 5% raise to Rupert Murdoch, instituting a dividend for investors. It’s as if the only thing they know they won’t do is give employees a decent contract.”
News Corp reported a 5 percent increase in revenue in its last earnings report in August, driven by strong increases in book publishing and its digital real estate services divisions. Its newspaper division also was able to record an increase in revenue, a modest 1 per4cent, but better than most other newspapers were able to report during the same time period. But profits from its newspapers, which include The Australian, The Times (UK), and its tabloids The Sun and NY Post, have been falling.
The timing of the union announcement comes a week after the company announced pay increases for its chairman Rupert Murdoch who received a 5.5 percent raise to $1,019,231, and CEO Robert Thomson, who received a 10.1 percent raise to $11.34 million. Murdoch also received an increase in his stock awards.