ITV has announced 600 job cuts and the closure of its standalone ITV Local broadband news service after reporting a 41 per cent slump in profits.
The broadcaster said today it planned to make £155m in cost savings this year, rising to £245m by 2011, and described current conditions in the advertising market as the worst seen in more than 30 years.
The measures include the closure of ITV Local “as a standalone business”, as the broadcaster concentrates on “delivering content via itv.com and video on demand”.
ITV Local, the broadcaster’s online TV service providing on-demand local news, weather and features, began as a pilot on the Sussex Coast in 2005 and was rolled out across the England and Wales ITV regions in 2007.
An ITV spokeswoman said staff working on the project, which was part of ITV Consumer, had entered a one-month consultation period.
She said the ITV Local brand might still be used in the future, but would be incorporated into itv.com.
In its end-of-year results, published this morning, ITV reported a three per cent drop in group revenues to £2bn. Like-for-like pre-tax profits were down 41 per cent to £167m.
The company has announced a £2.7bn writedown on its assets, including a £1.6bn impairment on goodwill and a further £1.1bn reflecting the weakness in the advertising market.
Executive chairman Michael Grade confirmed that 600 jobs would be cut and a further 70 vacancies would now not be filled.
He said: “Current conditions in the advertising market are the most challenging I have experienced in over 30 years in UK broadcasting.
“We are now implementing the plan needed to enable ITV to get through this difficult period and emerge as a leaner and fitter business.”
He added: “Inevitably in a tough market, the focus is on the road immediately ahead and ensuring that the company is strong enough to endure the short-term challenges it faces.
“Against this backdrop, it is imperative that every penny of our shareholders’ investment is deployed to deliver maximum return.”
ITV is looking to cut £155m in costs this year, a further £175m in 2010 and £245m in 2011.
“Visibility on future revenues is limited and trading in 2009 remains uncertain,” Grade added.
“However we expect to continue to outperform the market, increasing our share of television advertising revenues for the full year once again.”