Troubled ITV cuts jobs and costs
Article from the BBC Website
ITV has announced it is cutting 600 jobs across its businesses, and plans to make other "significant" savings.
The announcement came as ITV reported a loss of £2.7bn for 2008 after a huge write-down in the value of its assets.
About 150 of the jobs will be lost in Leeds with the closure of its Kirkstall Road studio, which makes programmes such as Heartbeat and The Royal.
ITV, which has been hit by a sharp drop in advertising revenue, also plans to sell the website Friends Reunited.
Excluding the write-down in the value of its broadcasting and online assets, Britain's biggest commercial broadcaster reported a profit of £167m, down 41% on 2007.
Chairman Michael Grade said: "Current conditions in the advertising market are the most challenging I have experienced in over 30 years in UK broadcasting."
ITV's advertising revenue has fallen with the growth of niche commercial channels and the internet.
The company estimates its net advertising revenue for the first quarter of 2009 will be down by about 17% on the same period last year.
Union anger
ITV's cost-cutting measures include:
- 600 jobs to go across its businesses
- Annual savings of £155m in 2009, rising to £245m in 2011
- Plans to sell Friends Reunited. ITV bought the social networking site for £120m in December 2005. It is now valued at about £40m
- Plans to sell its online business directory Scoot
- Closure of ITV Local broadband service, which provides local news content, as a standalone business
- Considering options for its SDN business, which leases space on Freeview.
Gerry Morrissey, general secretary of broadcasting union Bectu, rebutted ITV's claims that the cutbacks were as a result of the economic downturn.
"This is because of the mismanagement of ITV and has been going on for longer than the current credit crunch," he said.
He claimed that the group's management had been more interested in looking after shareholders and senior management, rather than staff and viewers.
He also accused ITV of giving up on its public service broadcasting remit after the broadcaster said it was going to move more towards popular entertainment programmes.
Uncertain trading
The broadcaster admitted that its targets set in 2007 were "no longer appropriate". The targets set had assumed growth in UK television advertising, but there had since been an "unprecedented deterioration in the global economic outlook", the broadcaster said.
It now plans to deliver annual savings of £155m in 2009, rising to £245m in 2011.
That includes a reduction in network programme investment. ITV said it would reduce its spending on programme-making by £65m in 2009, and by a further £70m in 2011.
However, Mr Grade insisted that ITV's targeted audience share would remain unchanged.
In 2008, ITV1 achieved an audience share of 17.2%, down from 17.9% in 2007. ITV's digital channels accounted for 4.8% of total viewing share last year.
ITV said it was difficult to predict its future revenues and warned that trading in 2009 remained uncertain.
The broadcaster said it would not pay a dividend in 2009.
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