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Channel 4 has revealed plans to cut nearly a fifth of jobs and axe underperforming linear TV channels under a new five year strategy to shift to becoming a mainly digital streaming service by 2030.
The UK broadcaster, which is state-owned but commercially funded, is seeking to slash costs amid the worst TV advertising downturn since the financial crisis of 2008 and focus more on developing digital services to compete with streamers such as Netflix and Amazon.
Channel 4 said on Monday that “to stay competitive and invest in digital priorities” it would need to reduce its operational costs, particularly from legacy services in traditional TV.
“As we shift our centre of gravity from linear to digital our proposals will focus cost reductions on legacy activity. In preparing for a new digital-first future, I hope we can make Channel 4 simpler . . . and create a more efficient, inclusive and high performing organisation,” said chief executive Alex Mahon
The changes will result in about 200 redundancies and the closure of a further 40 unfilled roles. The merger of some commissioning and content teams, including drama and film, will result in further job losses. The broadcaster employs more than 1,200 staff.
More than two-thirds of roles affected will be in “legacy operations”, Channel 4 said. Smaller linear channels that “no longer deliver revenues or public value at scale”, including its music video channels in 2024, will be closed.
The broadcaster added that it would sell its London headquarters, where it has been based for 30 years, as it continues to shift 600 roles away from the capital by the end of 2025.
Mahon said she was “very sad that some of our excellent colleagues will lose their jobs because of the changes ahead”, adding: “But the reality of the rapid downshift in the UK economy and advertising market demands that we must change structurally.”
Broader cost-cuts have already hit spending on some new shows. Channel 4 said it would focus on fewer new titles that could generate greater scale and impact and shift further to a digital-first commissioning strategy focused on driving streaming growth.
It said that digital revenues accounted for 27 per cent of the broadcaster’s total revenues last year, and it wants to grow this to 30 per cent in 2024 rising to 50 per cent by 2030.
The broadcaster’s management devoted extra financial resources to fight off Tory government proposals for its privatisation in plans that were dropped last year.
The plans come amid a broader round of job cuts across the UK’s TV and film sector. Other broadcasters, including Sky and Paramount, have announced they are slashing hundreds of roles as they seek to restructure operations.
The BBC is also reducing staff as it faces a financial crunch caused by the freeze in the licence fee over the past two years.
Mahon has already admitted that the broadcaster might need to tap an emergency £75mn revolving debt facility to help cover the financial hole caused by the drop in advertising revenues. The broadcaster expects to operate with a financial deficit for the next two years.
Channel 4 — which had previously outsourced production of the shows on its airwaves to independent production companies — last year obtained the ability to make its own programmes and hold the rights to them for the first time in its 40-year history, which could further boost revenues.
