Murdoch takes $99m hit in print shake-up

The company, whose titles include The Times and The Sun, said that cover price and circulation increases were failing to make up for lower advertising revenues and the costs of the major reorganisation of printing.

Mr Murdoch gave more details of the progress of the reorganisation on a conference call with Wall Street analysts last night. The $99m provision for redundancy costs was being made now, but would only be spent over the next couple of years as three new state-of-the-art printworks come into service. It is part of a £600m investment programme first trumpeted by the company in 2004. It is moving its Wapping facility from east London to Enfield in north London, and building additional presses in Glasgow and Liverpool.

"Now we require 1,000 mechanical staff, but soon we will be able to make do with 350," Mr Murdoch said. "Now we have only limited capacity for colour in our newspaper, soon we will be able to have colour on all our pages. Over time, the investment will result in considerable gains."

The provision meant News Corp's operating income in the second quarter was $920m, down 4 per cent on the same period a year before. Global revenues, at $6.7bn, were shy of expectations of $6.9bn.

Mr Murdoch lavished praise on his satellite businesses, including BSkyB in the UK. He said the company would beat its target of increasing subscribers by 2 million to 10 million by 2010.