ITV has revealed that it has furloughed roughly 15% of its UK workforce as it bids to cut costs amid the coronavirus crisis that has shut down the majority of its productions and ravaged advertising revenue.
In a trading update on Wednesday, the UK’s biggest free-to-air commercial broadcaster said 800 staff have been placed on the government’s job retention scheme, the majority of whom work in production arm ITV Studios. More staff are being furloughed in other territories, it added.
The company said its total external revenue dropped 7% to £694M ($872M) in the first three months of the year, with ITV Studios’ turnover falling 11% to £342M and advertising income down 2% to £426M.
But worse looks yet to come. ITV said its ad revenue plummeted 42% in April at the height of the pandemic, which mirrors the declines seen at its rival Channel 4. This was despite its main network’s share of viewing hitting an 11-year high in Q1. ITV declined to provide guidance for Q2 and the rest of the year amid a “rapidly changing” environment.
ITV said it plans to make £60M of savings in 2020, double what it previously estimated. The broadcaster is also stripping £100M out of its content budget, with the lack of big sporting events such as Euro 2020 producing natural savings. Non-critical spending projects are bing paused, while pay and hiring freezes have been put in place.
ITV CEO Carolyn McCall said: “ITV has taken swift and decisive action to manage and mitigate the impact of COVID-19, by focusing on our people and their safety, and by continuing to reduce costs and tightly manage our cashflow and liquidity.
“We are now very focused on emerging from this crisis in a strong position, continuing to offer advertisers effective marketing opportunities and making preparations to restart productions safely.”
ITV added that it is in the “final stages” of drawing up industry-wide production safety protocols and is involved in active discussions with the government over resuming filming on ITV Studios shows, including soaps Coronation Street and Emmerdale. Production is coming back online in other territories, including Australia, where The Chase and The Voice are now filming. In the meantime, there has been “good demand” for finished shows.
ITV said it has £100M in cash it can dip into, as well as £829M in credit facilities it can call upon. ITV’s share price has rallied in recent weeks from a low of 54 pence in March to 72 pence at market close on Tuesday.
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