Signaling a major retrenchment by a leading media conglomerate, 21st Century Fox said it will cut $250 million out of its budget for the 2017 fiscal year, which starts in July.
The cuts will impact staff in U.S. operations including the Fox Networks Group and the 20th Century Fox film studio. Employees at these divisions were offered buyouts on Monday.
"As we position 21CF for the future, we want to ensure our organization remains agile and structured to fully capture the many opportunities ahead of us. With this we are looking across our film and television businesses to transform certain functions and to reduce costs. As part of this process, which is in its early stages, today some colleagues from Fox Networks Group and 20th Century Fox will be offered a generous benefit package if they opt to voluntarily leave the company," 21st Century Fox said in a statement.
The cuts come as Fox media networks seek to offset the erosion of linear audience by SVOD platforms. Ratings for FX, for example, have slipped over the last year, and the conglomerate has had to spend aggressively to build its national sports cable network, Fox Sports 1. Ratings for Fox's broadcast network have also been in decline.
For the fiscal year ending June 30, 2015, the company's television division suffered an 8 percent decline in revenue and a 19 percent drop in operating income.
Fox's film division, meanwhile, is also facing increasing production cost and falling attendance at movie theaters.
"To ensure we make the most of this new world, we need to adjust, adapt, and organize for the future," Peter Rice, the chief executive of Fox Networks Group, said in a staff memo obtained by the Wall Street Journal.
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