U.K. pubcaster Channel 4 is cutting up to 15% of its workforce and trimming budgets by $185 million over two years as the ad downturn takes a bite out of bottom lines.
The web, in the midst of campaigning for a public subsidy, has told staff that it plans to cull a maximum of 150 jobs. Savings of $185 million have been identified as budgets are cut this year and next while Channel 4 confronts what it describes as “some of the most challenging economic circumstances in its history.”
As a result, the program budget is being cut by more than $46.25 million. A further $46.25 million is being slashed from other areas, including marketing, new business investment, new media and general overheads.
“Channel 4 has outperformed its competitors in recent years, but the economic downturn is now affecting the entire media industry,” said CEO Andy Duncan. “With revenues falling, we’ve no alternative but to cut costs. My particular regret is the impact of these job losses amongst our skilled and dedicated workforce.”
Channel 4 estimates that the downturn in TV advertising this year is around 5%.
The web is keen to demonstrate that it is doing everything it can to improve efficiency as it lobbies for a public subsidy of around $185 million a year by 2012. By then, Channel 4 argues, the impact of new competition will have made it impossible for it to meet its public service commitments.
U.K. regulator Ofcom, which is expected to make an announcement on Channel 4 funding later this week, accepts the basic thrust of the broadcaster’s argument but disagrees over the amount of coin the web needs.
There is increasing speculation that Ofcom will propose that cash from the BBC license fee, paid by all U.K. TV-watching homes, be redirected to Channel 4.