BBC to cut 1,000 jobs

Tony Hall 2015The BBC will cut more than 1,000 jobs as the UK pubcaster aims to reduce costs.

BBC director general Tony Hall announced the cuts today saying they were down to an unexpected increase in the number of families refusing to pay the licence fee that funds the organisation.

The cuts are expected to save £50 million (US$78 million) and will mainly affect middle-management layers and staff in areas such as marketing and communications, IT support and legal. Commercial division BBC Worldwide will be included in the process.

Currently parts of the BBC have up to ten layers of management, and this will be cut to a maximum of seven. The proposed plans noted “simpler organisation will inevitably require fewer managers, especially at senior levels”.

There will also be a push to reduce the number divisions, with a first step being the coming together of the technology teams at BBC Worldwide, Engineering and Digital.

The BBC says its licence fee income has fallen by £150 million in 2016/17 from the 2011 figure, as people switch to iPlayer, mobile and online catch-up services and ditch the TV set.

The BBC said it is already on course to deliver £1.5 billion in savings by 2017, which is the year of the vital renewal of its Charter. This will decide the size and shape of the BBC’s funding going forwards.

The BBC said it would this summer identify “specific savings opportunities” and final decisions taken in early autumn.

“A simpler, leaner, BBC is the right thing to do and it can also help us meet the financial challenges we face,” said Hall.

“We’ve already significantly cut the costs of running the BBC, but in times of very tough choices we need to focus on what really matters – delivering outstanding programmes and content for all our audiences.”

Hall told staff in an internal email the broadcaster was facing “a very difficult financial situation” and that he needed to ensure it was being run “as efficiently as possible”.

“I recognise this is a very tough message,” the note added. “And, I want to make it clear that even though we’ll inevitably be closing posts, it’s not a reflection of the commitment or hard work of the people doing those jobs. This is about structural change. It’s about doing the right thing – to deliver maximum value to audiences, in a very challenging financial situation.”

The news comes as auditor PwC today published an independent study that showed the BBC to be among the most efficient organisations in either the UK’s public and private sectors.

Separately, the BBC is pushing through plans to create BBC Studios, a commercial-focused entity that would allow BBC in-house producers to create for other broadcaster for the first time, and outside production groups to land more BBC commissions.

The pubcaster has called for the Terms of Trade, which were established in 2003 and guarantee small indies back-end revenues for their IP, to be reworked in the light of the various mega-mergers among global production groups.