Channel 4 is drawing up plans to cut potentially as many as 200 jobs in its biggest round of layoffs in more than 15 years, as it seeks to make savings to weather the worst TV advertising downturn since 2008.The broadcaster, which has undergone a rapid expansion in recent years with staff numbers swelling to a record level of more than 1,200, aims to dramatically reduce a wage bill that now stands at more than £108m a year.It said the restructure, which management began working on late last year, was intended to focus on accelerating its digital streaming strategy while limiting the extent to which it must make deep cuts to its £700m-plus content budget.“Like every organisation, we are having to deal with an extremely uncertain economy in the short term and the need to accelerate our transformation to become a wholly digital public service broadcaster in the long term,” a spokesperson said.“As a result, we need to continue to divest from our linear channels business and simplify our operations to become a leaner organisation.”When the TV advertising market slumped during the financial crisis of 2008, Channel 4 sought to balance its finances by cutting 200 jobs, almost a quarter of its then 875 permanent employees.The cuts planned now are not thought to be as deep in percentage terms, but the company’s headcount is much higher.The latest restructuring is likely to put significant pressure on London-based staff again, given Channel 4’s promise to increase employee numbers in the “nations and regions” to 600 by 2025.The broadcaster, which gave that commitment to the government in The Next Episode, its manifesto in 2022 to counter privatisation plans, is understood to have more than 500 roles in centres including Leeds, Glasgow, Bristol and Manchester.According to the latest annual report for 2022, Channel 4 employed 1,197 full-time equivalent employees – 261 in the commercial department, 463 in operations, 429 in creative roles and 44 at its 4Talent arm. Staff numbers have continued to grow since the report’s publication, which covered a period when the TV ad market was still vibrant.“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, so we can inspire new generations of viewers and ensure Channel 4 remains a relevant and rebellious force in British creative and cultural life for the long term,” the spokesperson said.“By doing so, we will further continue our support of Britain’s uniquely brilliant independent production sector. We will share further details with our staff, partners and stakeholders soon.”The company has already taken the axe to its programming budget, which hit an all-time record £713m in 2022, by pausing, cancelling and phasing the release and commissioning of a number shows to stretch budgets.Shows cancelled include the daytime chatshow Steph’s Packed Lunch, SAS: Who Dares Wins and The Big Narstie Show. Other to go include Four Weddings, Scared of the Dark, Five Dates a Week and the medical documentary Rescue: Extreme Medics.“Independent production companies are suffering,” said one Channel 4 source. “They haven’t seen us bleed. We’re next.”The company’s chief executive, Alex Mahon, told the Commons culture committee in November that the state of the TV ad market was so bad it was in “shock territory”. She added that the broadcaster expected to make losses in each of the next two years, after three years of surpluses.Channel 4 is also considering a request to tap a £75m credit facility in meetings with officials from the Department for Culture, Media and Sport and the Treasury in the coming months, although it does have £253m of reserve cash.During the committee session Mahon and Ian Cheshire, the company chair, said management was in the process of drawing up a new plan beyond its current strategy to the end of 2025 to futureproof the business.Channel 4 is particularly vulnerable to a downturn in traditional TV advertising because it accounted for two-thirds of its £1.14bn in total revenues in 2022, the last year full results have been published.It made £255m in digital ad revenues from its streaming service, which are growing at a healthy 14% but not fast enough to balance the decline in traditional TV advertising.Strong growth continued in 2023 with streaming revenues rising to account for 25% of total income.Channel 4 also makes £121m in non-advertising revenues, which include income from its film division and partnerships.In its last annual report it listed its headquarters in Horseferry Road, Victoria, which it owns, as being worth £90m.
© 2024 Guardian News & Media Limited.