The effects of Brexit uncertainty are starting to rear their ugly heads: ITV is preparing to cut 120 jobs (out of 6,000 total jobs) in a bid to chop £25M ($30.6M) from costs in the next year, a move largely driven by the possible effects Brexit will have on the broadcasting and media buying business.
The announcement came on Monday, three months after ITV’s chief exec Adam Croizer, said the broadcaster would look to make these savings in a post-Brexit climate. ITV said the move was driven because of “political and economic uncertainty.”
Since the UK vote to leave the European Union on June 23, UK broadcasters look set to face their worst year for TV advertising since 2009, with total revenues forecast to decline by up to 2 per cent.
Before the EU referendum, analysts forecasted a 7.4 per cent hike in TV ad spending for the year. Now ITV says it expects its ad revenues to drop 1 per cent in the first nine months of the year. Last year, the channel took more than half of its revenues from advertising and while the company said it was “too early to predict” what will happen in 2017, it is taking precautions to get ready for what “may be another difficult year.”
“At a time of political and economic uncertainty in our key markets, it’s important that we are in the strongest possible position to continue to invest in our strategy and to meet any challenges and opportunities ahead,” said an ITV spokesperson.
While ITV’s sole business is not UK-based – Crozier has invested heavily in the US by building a large TV production operation there –, last year the UK market accounted for 85% of the near £3B ($3.6B) that the broadcaster made. Half of its total staff, some 3,000 people, are UK-based.
“We have taken costs out across ITV in a managed and sensible way over the past six years and we must continue to keep a tight control on spending to ensure that we are operating as efficiently and effectively as possible, while maximising our ability to invest in the high-quality programming that drives ITV’s success,” said the spokesperson.