Channel 4 is planning to cut up to 200 jobs, the broadcaster confirmed to The Guardian this morning, as part of efforts “to become a leaner organisation” in the face of an ongoing advertising slump.
The plans spell Channel 4’s most extensive layoffs since the 2008 financial crash, when the UK broadcaster was forced to cut almost one quarter of its 875 employees. Since then, the company’s headcount has risen to over 1,200 staff, giving the business an annual wage bill over £108 million.
Now Channel 4 finds itself facing what the broadcaster calls the worst advertising downturn in 15 years, prompting cuts to its content spending, and the possibility of tapping a £75 million debt facility set up in 2018 in case of financial hardship.
The company is also transitioning into a “wholly digital public service broadcaster”, aiming to have 30 percent of revenues generated by digital advertising by 2025. As part of this strategy, the broadcaster plans to “divest from our linear channels business” in order to streamline its operations.
“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,” said a Channel 4 spokesperson.
Reduction and production
Even with these economic challenges, Channel 4 is on track to meet its 30 percent digital revenue share target. In 2022, digital made up 22 percent of its revenues, and grew 14 percent YoY. And last month, the broadcaster reported that viewing on its streaming service was up 24 percent in 2023.
But despite growing its digital sales, ad revenues are not strong enough to plug the shortfall created by the advertising downturn. The business still relies on linear advertising for around two-thirds of its revenues, causing the company to seek further cost-cutting measures.
Channel 4 has already cut its content spending, according to the broadcaster, having spent an all-time high of £730 million on programming in 2022. Casualties of the content cull include Steph’s Packed Lunch with Steph McGovern, and the reality format SAS: Who Dares Wins (although the celebrity version is set to continue this year).
These moves could threaten plans Channel 4 laid out in 2022, when the PSB was threatened with privatisation. The broadcaster highlighted its economic and social contribution to the UK, which included its support for the independent production sector, as well as its role in creating jobs. As part of the proposals, the company aimed to create 600 roles outside London by 2025.
The latest strategy poses clear challenges to these employment targets, but Channel 4 suggests the layoffs could enable the broadcaster to keep delivering investment in UK production companies. “By doing so, we will further continue our support of Britain’s uniquely brilliant independent production sector,” said the spokesperson.
