600 jobs to go as ITV sees revenues slump

ITV today announced it was to axe 600 jobs as it faced up to a sharp downturn in advertising revenues.

It wants to make savings of £155 million this year, rising to £175m next year and £245m in 2011.

The broadcaster's chairman Michael Grade, a former boss at both the BBC and Channel 4, said current advertising conditions were the worst he had faced in over 30 years of broadcasting.

ITV said that it would make £70m of efficiency savings in the next two years, mainly through central services and studios outside London. It also said it would slash programme investment by £65m in 2009, while making another £40m in regional news savings.

There is speculation that high-earning stars of shows like Coronation Street and X Factor could be hit by the programming cuts.

Channel favourites Ant and Dec, who are on a £20m exclusive deal, have already hinted that they might not stay with the company.

The broadcaster has also put its Friends Reunited social networking site up for sale.

Mr Grade 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.

"Our priorities have to be aligned to the changed economic context. The board therefore recognises that the 2012 revenue targets set in 2007 are no longer appropriate and we are focusing on our core business as a producer-broadcaster, on reducing our costs and on cash generation."

Today's results, for the full 2008 financial year, show that the company suffered pre-tax losses of £2.73 billion after it wrote down the value of assets on its balance sheet. Stripping out the exceptional items, profits were down 41 per cent at £167m. It also axed the payment of a final dividend to shareholders.

ITV said that overall television net advertising revenues were down by four per cent to £1.4bn.

In September, the company had forecast UK television advertising growth of between 1.5 and 2 per cent but it said it was now seeing "an unprecedented deterioration in the global economic outlook and the UK television advertising market".