ITV cuts jobs and budget

Broadcaster set to slash workforce and programme budget as ad revenues slump.

ITV is set to make around 15 per cent of its commercial staff redundant as it looks to deliver savings in the wake of a dramatic fall in advertising revenues.

The broadcaster, which this week announced a total of 600 job cuts across its entire business, also plans to slash £65 million from this year's programme budget.

Sources indicated that ITV now plans to fully implement a 2008 Boston Consulting strategy for restructuring that recommended 25 per cent of commercial roles were axed.

Last year, around 9 per cent of commercial roles were made redundant, leaving a further 16 per cent of roles to be axed in this second wave of cutbacks.

However, the bulk of redundancies in ITV Commercial are expected to come from its internal sales team, the back office team that is responsible for placing advertising spots. ITV sources said that "client-facing" teams would not be cut back significantly.

Announcing the cost savings, the executive chairman, Michael Grade, revealed a 41 per cent decline in 2008 profits to £167 million last year and said that ITV's ad revenues for the first quarter of 2009 were down 17 per cent.

He also outlined plans for the disposal of the online businesses Friends Reunited and Scoot as ITV's recovery plan, which Grade announced in 2007 and included a target of delivering £150 million in digital revenues by 2012, was torn up.

ITV plans to make a total £575 million in savings over the next three years, with £135 million of this coming from a reduction in programming budget. While continuing to invest in new drama, the broadcaster has announced plans to scale back on some of its established drama output, including cutting The Bill to one episode a week.

Grade said that ITV had held its share of audience and of television ad revenue.