UK’s Channel 4 cuts 18% staff, closes channels & makes ‘significant shift’ to ‘streaming-first’ content

The Great British Bake-Off

Channel 4 in the UK is cutting 18% of its workforce and will close channels as part of a strategy to become a “digital-first” streamer by 2030.

The strategy, titled Fast Forward, will be built around three pillars focused on: digital growth, including a rejig of commissioning teams and programming investments; diversifying into new businesses, including IP ownership; and “re-engineering” the business for streaming, namely reducing operational costs away from channels.

Digital revenues accounted for 27% of C4’s total revenues last year, but the broadcaster aims to increase this to 30% in 2024 and pass the “tipping point” of 50% by 2030.

Channel 4’s pillars, costs & closures

Job cuts had been looming since last year, with the broadcaster facing a contracting advertising market that has also impacted other commercial operators such as ITV.

C4 revealed today that there would be 200 redundancies, with an additional 40 unfilled roles now being closed entirely.

Alex Mahon (Source: RTS/Richard Kendal)

As part of the Fast Forward strategy, C4 said it would reduce its operational costs out of “legacy activities”, with 70% of the cuts coming from this area which includes linear channels.

The Box branded channels will be shuttered this year, with “small linear” networks that don’t offer scale also being shuttered “at the right time”.

The move will return C4’s headcount “close to 2021 levels”, although it added that the promise to offer 600 roles outside of London by 2025 would remain intact.

A shift to flexible working will also be undertaken, leading to the broadcaster leaving its Horseferry Road headquarters, with a “new fit-for-purpose office space” sought in central London.

C4 said it would also offer “important, distinctive and disruptive British content” to audiences across streaming and social, with a “significant shift” in spending on drama, high-end docs, comedy and reality. It will also target younger viewers on platforms including YouTube.

The shift will see changes proposed to C4’s commissioning team to reflect the streaming-first approach, with a “ruthless focus” on cut-through with “fewer, stronger new titles that generate more scale and impact”.

It also aims to double social views through 4Studio and increasing the amount of content on YouTube while also building new distribution partnerships to expand C4’s output.

It also wants to diversify and invest into new businesses “to rapidly scale diversified revenue streams,” with owning IP being explored via the framework being proposed in the UK Media Bill. It also wants to double customers of its Channel 4+, its streamer’s ad-free tier, by 2030.

It also aims to build a “double-digit million” ecommerce business by 2030 to allow viewers to interact and purchase products through digital platforms and will shift further into FAST.

Strategy shift blamed on ‘rapid downshift’ in UK economy

The new-look strategy, along with the associated cuts that first emerged earlier this month, follows months of spending freezes at the broadcaster.

It has also cancelled series ranging from SAS: Who Dares Wins to Steph’s Packed Lunch, as it looked to deal with “market change and complexity”, as Mahon described it earlier this month. Last year she said the industry is in “market shock territory”.

C4 is a public broadcaster but entirely funded by advertising, with a spend of just over £700m ($890m) on programming in 2022. Its output ranges from dramas such as Somewhere Boy to The Great British Bake Off, while international acquisitions have included Fox’s single-camera comedy Animal Control, which airs on C4’s E4 network.

Somewhere Boy (Source: BBCS)

C4 said the changes, which build on its Future4 strategy unveiled in 2020, would enable it “to become leaner, simpler and nimbler, divesting from legacy operations to support digital priorities”.

Alex Mahon, C4 CEO, added: “While getting ourselves into the right shape for the future is without doubt the right action to take, it does involve making difficult decisions. I am very sad that some of our excellent colleagues will lose their jobs because of the changes ahead.

“But the reality of the rapid downshift in the UK economy and advertising market demand that we must change structurally. As we shift our centre of gravity from linear to digital our proposals will focus cost reductions on legacy activity. In preparing for a new digital-first future, I hope we can make Channel 4 simpler – for staff and our suppliers – and create a more efficient, inclusive and high performing organisation.”

She added: “Channel 4 was designed to be ahead of the curve and has never stood still. The rate of change in our market is only speeding up. Our new strategy will accelerate our digital transformation – building on 2020’s Future4 strategy and our founding public service principles – so Channel 4 remains a trusted, disruptive and distinctive brand into the 2030s, offering brilliant shows that people love and that matter.

“We are genuinely excited about the future. Channel 4 means something to British people – we are trusted, we are a beacon for quality, we stand out for fresh and exciting ideas that matter and will be even more important in a crowded landscape of global content.”