Channel 4 is set to announce more than 200 job cuts as the UK broadcaster seeks to slash costs amid the worst TV advertising downturn since the financial crisis of 2008.
The publicly owned broadcaster is expected to announce on Monday it will dismiss over 15 per cent of the roughly 1,300 people it employs, in an effort to cut its wage bill as it is hit by a steep decline in spending by brands on traditional television advertising.
“Like every organisation, we are having to deal with an extremely uncertain economy,” a Channel 4 spokesperson said in a statement, noting that the company was aiming to accelerate its transition into digital broadcasting.
The words echo similar warnings by ITV boss Carolyn McCall, who last year said the UK advertising market was experiencing its worst decline since 2008, when the country was mired in recession.
The move comes amid a broader round of job cuts across the UK’s TV and film sector. Other broadcasters including Sky and Paramount have announced job cuts, with hundreds of roles cut across the businesses as they seek to restructure operations for the future.
The BBC is also reducing staff as it faces its own financial crunch caused by the freeze in the licence fee over the past two years.
The round of Channel 4 lay-offs — which are expected to hit 200-250 employees — comes as part of broader cost-cuts that have already hit spending on some new shows.
Channel 4 chief executive Alex Mahon has already admitted that the broadcaster — which is state owned but commercially funded — might need to tap an emergency £75mn revolving debt facility to help cover the financial gap caused by the drop in advertising revenues.
She told a committee of MPs in November last year that the broadcaster was facing “market shock territory” after hopes for a recovery in the second half of the year were dashed by continued pressure on spending. The broadcaster now expects a financial deficit for the next two years.
It intends to pivot away from traditional broadcasting and towards digital revenues, as it adapts to the fast-changing viewing habits of its audiences in light of increasing competition from online streaming services like Netflix.
“Whilst organisational change is never without personal impact, it is a necessary response to allow us to stand out and succeed in a world of global entertainment conglomerates and social media giants,” a spokesperson for Channel 4 said.
The broadcaster’s management also had to devote extra financial resources to fight off government proposals for its privatisation, plans that were dropped last year.
Channel 4 — which had previously outsourced production of the shows on its airwaves to independent production companies — last year obtained for the first time in its 40-year history the ability to make its own programmes and hold the rights to them.