600 jobs to go as ITV reports £2.7billion loss
600 jobs are to go at ITV as the company looks to lose £65million from its programme budget in 2010 as its reports a loss of £2.7billion for 2008.
A further reduction of £70million will be made the following year.
It had been speculated that the company was set to close its Leeds based production house, a move which looks all the more likely but he yet to be confirmed by ITV which has admitted to being in a consultation process over the move.
Plans to sell off networking site Friends Reunited which it bought three years ago for £175million were also confirmed as it looks to focus on online video services.
Michael Grade, executive chairman for ITV, said: “Current conditions in the advertising market are the most challenging I have experienced in over 30 years in UK broadcasting. This is reflected both in our financial results for 2008 and the tough actions we are announcing today.”
Andy Viner, head of media, at accountants and business advisors BDO Stoy Hayward commented: “ITV has suffered a torrid year - it dropped out of the FTSE 100, experienced a reduction in advertising, saw its share price continue to fall, made cuts to jobs and programming, suffered a decrease in profit, saw its debt levels continue to increase and has suspended its dividend for 2009.”
“Coupled with a bleak outlook for advertising revenue in 2009, life in the ITV camp is looking grim, particularly as there are less global sporting events for it to cover and it has lost the rights to cover the Formula 1 World Championship to rival broadcaster BBC.”
Viner continued to say that he believed that other advertising-funded media companies would renew efforts to force the Government to help it through the advertising downturn.
“Today’s job cuts will come as little surprise to those in the industry; however, the number may provoke a union backlash as unions had previously accused the company of focusing on shareholder value rather than tackling the downturn in advertising expenditure,” Viner continued.
He also said that there was positivity within the company’s result in that its online division continued to increase its YOY revenue by nine percent and saw growth in its global business.
“ITV has the potential to build on this growth - particularly in light of the current trend of consumers neglecting traditional paper media and consuming news and information from online sources - and claw back some advertising revenues. Adapting to the rapid changes in the global media landscape will be key to ITV’s future," concluded Viner.