UPDATE 1-Dow Jones plans pay freeze, job cuts possible-memo

(Adds market activity, Dow Jones CEO comment)

By Robert MacMillan

NEW YORK Jan 8 (Reuters) - News Corp's (NWSA.O) Dow Jones & Co, which owns The Wall Street Journal, plans to freeze employee salaries because of the prolonged economic downturn, according to a memo sent to workers on Thursday.

The memo, sent by Dow Jones Chief Executive Les Hinton and obtained by Reuters, said the one-year freeze is part of efforts to save money.

It does not cover unionized staff, but the company is also seeking a freeze for those employees, the memo said.

The freeze would help mitigate future possible job cuts, Hinton wrote.

"I know you are all well aware that the uncertainty of the broader economy touches all our businesses," Hinton wrote.

"We don't know how profound the problems will be, or how long they will last. The only prudent course is to continue managing all expenses aggressively until we can see more clearly where we are headed."

The memo was first reported on MediaBistro.com's FishbowlDC blog. Hinton's memo comes as Rupert Murdoch's News Corp gets ready for a bruising year, along with other major media conglomerates and U.S. newspaper publishers.

Advertising revenue, already in a slump, likely will decline further as the financial crisis deepens, many executives and analysts have warned.

On Wednesday, Time Warner Inc (TWX.N) cut its operating profit forecast, in part because of weaker advertising.

Earlier on Thursday, news and data provider Thomson Reuters Corp TRIL.L (TRI.TO) said revenue growth rates would slow as a result of the financial crisis.

News Corp slashed its full-year profit forecast in November. It said 2009 operating income would fall by low- to mid-percentage terms, compared with a previous forecast for growth of 4 percent to 6 percent.

News Corp shares closed down 1.44 percent at $8.92 on the Nasdaq stock market.

Dow Jones Newswires and Reuters compete in providing news and financial information. (Reporting by Robert MacMillan; Editing by Phil Berlowitz and Ted Kerr)