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U.K. TV giant ITV will cut around 120 jobs as part of cost cuts it had announced in July due to the “wider economic uncertainty” following the Brexit vote.
The company, led by CEO Adam Crozier, said in the summer that it would look for £25 million, or $32.8 million at the time, in cost cuts next year after the June vote in favor of Britain’s exit from the European Union. Back then, it said that “some” job cuts could be involved.
ITV has now identified a target of 120 job reductions across its business. The company has 3,000 U.K. employees and 6,000 worldwide. It emphasized it won’t cut its annual programming budget of more than $1.2 billion (£1 billion) globally, with U.S.-based employees forming its next largest workforce.
“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 as we continue to grow a successful business,” an ITV representative said.
“We have taken costs out across ITV in a managed and sensible way over the last 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 whilst maximizing our ability to invest in the high quality programming that drives ITV’s success,” the rep added.
Prognosticators have reduced their U.K. advertising revenue forecasts for this year and beyond, and companies have said ad spending this year has been affected by the Brexit referendum. ITV itself has said that it expects ad revenue to be down 1 percent in the first nine months of 2016 and signaled that 2017 could also be a difficult year.
Jefferies analyst Tamsin Garrity said the news of the job cuts suggests the company’s cost cutting plan was “well on track to offset advertising uncertainties.”
She added: “Following the Brexit vote, there has been uncertainty for advertisers. July retained positive momentum as agreements were already in place for TV advertising prior to the vote and the Euro 2016 [soccer tournament] was still showing, therefore we expect ITV net advertising revenue to be reported at plus 6 percent. However, ITV management guided to minus 7 percent for August as the Olympics were being shown on the BBC and provided a range for September of minus 5 percent to minus 9 percent, in part because of the tough comparative from the rugby [world cup] last year of plus 14 percent.”
She forecasts a 8.4 percent drop in ITV advertising revenue for the fourth quarter, which would leave the full year down 3 percent, compared with a consensus analyst view of a 1.5 percent drop. Garrity continues to have a “buy” rating on ITV’s stock.
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