Earlier this year, News Corp (NSDQ: NWS). confirmed it wanted to sell Fox Mobile. Now it appears that in the meantime, it’s cutting costs and keeping lean.
mocoNews.net has learned and confirmed that Fox Mobile on Monday announced it will lay off staff in Germany, as well as in other markets where it operates. A source close to the operation says the cuts
in Germany are in the region of 15 percent of their staff, or around 75 employees.
These layoffs come about a year after another round of about 70 job cuts. This recent downsizing does not affect senior management of the European operation, with Mark Anderson in charge and Markus Peuler and Markus Thorstvedt working under him.
The source told mocoNews that the cuts will mean reductions all across the board – excepting senior management – but will not result in any specific operations shutting down.
A Fox spokesperson, meanwhile, provided a statement that claims the cuts are being made because the company is shifting its focus: “Fox Mobile Group announced yesterday that it will restructure its worldwide mobile entertainment businesses in order to focus resources on core assets and invest for future growth in high-potential areas such as its on-demand mobile video and entertainment platform. As a result of this decision, there was a reduction in the company’s global workforce.”
Fox Mobile in Europe was formed out of News Corp.’s $400-million acquisition of mobile content company Jamba, which it bought in two pieces: 51 percent in 2006 as a JV with Verisign, and then Verisign’s stake about two years later.
When News Corp. first invested, Jamba’s core business of mobile ringtones, wallpapers and other amusing snippets was a huge industry. At its peak, in 2007, ringtones were bringing in over $700 million in revenues in the U.S. alone, according to SNL Kagan.
But that business has not continued that same growth trajectory, and has contracted in some markets. Jamba, meanwhile, didn’t really significantly shift its product line. In fact, if you look at the newsflow from the German operation over the last year, the biggest (and only) press releases are about Rene La Taupe, a ringtone character that’s been catapulted into a chart-topping popstar in France. In other words, the same kind of stuff that made Jamba into a household name in the first place a decade ago.
Over at Fox Mobile in the U.S., though, another mobile strategy has been brewing in the form of Bitbop, the mobile-based, on-demand TV service.
Fox is pinning a lot on this one, and it looks like it would ideally like it to become the core proposition of a Fox Mobile business. Bitbop launched in May with some 25 content partners, and the company is understood to have plans to launch it in Germany sometime in the first quarter of 2011, on both PCs and mobiles, and is considering extending that into other European markets, too.
Rene La Taupe, presumably, will be spared in this most recent and future rounds of cuts: