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Channel 4 is to announce more than 200 job cuts in a bid to cut costs amid the worst TV advertising crisis since the 2008 financial crisis.
The broadcaster is expected to announce on Monday that it will lay off more than 15% of the around 1,300 people it employs, in a bid to cut its wages as it is hit by a sharp decline in brands’ spending on traditional TV advertising.
“Like every organisation, we face an extremely uncertain economy,” a Channel 4 spokesperson said in a statement, stressing that the company aims to accelerate its transition to digital broadcasting.
The words echo similar warnings from 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 wider series 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 split across the companies as they look to restructure operations for the future.
The BBC is also cutting staff due to the financial crisis caused by a license fee freeze over the past two years.
Channel 4’s round of redundancies – expected to hit 200-250 staff – is part of a wider cost-cutting drive that has already hit spending on some new shows.
Channel 4’s chief executive, Alex Mahon, has already admitted that the broadcaster – which is state-owned but commercially financed – may need to draw on a £75m emergency revolving debt facility to help cover the financial gap caused by the decline in advertising revenues.
He told a committee of MPs in November last year that the broadcaster was facing “market shock territory” after hopes of 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 move away from traditional broadcasts and towards digital revenues, adapting to its audiences’ rapidly evolving viewing habits in light of growing competition from online streaming services such as Netflix.
“While organizational change is never without personal impact, it is a necessary response to enable us to stand out and succeed in a world of global entertainment conglomerates and social media giants,” a Channel 4 spokesperson said.
The broadcaster’s management also had to allocate additional financial resources to fend off government proposals for privatization, plans abandoned last year.
Channel 4 – which had previously outsourced the production of its broadcast shows to independent production companies – last year was granted the ability to make its own programs and hold the rights to them for the first time in its 40-year history.