BBC Cuts Annual Budget by $1 Billion, Slashes 2,000 Jobs

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Director general Mark Thompson unveils deep cuts across the organization.

LONDON - BBC director general Mark Thompson said Thursday that the BBC will be "significantly smaller" in the next four years after the implementation of a major cuts program aimed at cutting costs by 20 percent and delivering annual cost savings of $1 billion a year.

The pubcaster will consult the public on a wide range of proposed cuts to channel output, acquisitions, sports rights and program services. In a separate set of developments it will introduce a program of job cuts and internal savings that will see 2,000 posts lost.

"By 2016 the BBC will be significantly smaller than it is today, employing fewer people, occupying far less space and spending far less money both absolutely and as a proportion of the U.K. broadcasting industry," he said in a briefing to BBC staff.

Announcing the changes Thompson said that although the BBC had been forced to accept the lower license fee settlement which trims the BBC's total annual budget to $5.36 billion a year, the changes were in line with the rest of the industry. But he warned that the pubcaster's core purpose could not survive another round of cuts.

"We cannot do this again," he said.

Under the plan, BBC1, news and children's services will be almost unchanged, but BBC2 will no longer have originated daytime programs of it's own, instead it will carry factual repeats and news coverage from other parts of the BBC. Digital youth and comedy channel BBC3 will move out of London altogether while BBC4 - the arts and high end drama content channel - will share more content with BBC2 and the channels will work more closely.

Management structures will be flattened and organizational and support staff will face cuts.

Repeats across the BBC will become more common and spending on online operations will be cut by 25 percent.

Hollywood acquisitions and live sports rights spending will also be curtailed.

The BBC said the proposals would "involve painful choices including significant job losses at every part of the organization" which would mean "some diminution in service to the public, though we have taken every step to minimize this."

But Thompson told staff that the changes were in the context of a tough economic climate all round.

"The BBC is operating in a media world that is changing. People in this business have to accept that careers will absorb periods of turbulent change."

BBC Trust chairman Chris Patten - who heads the pubcaster's governance committee, said: "I can't remember a time in my political lifetime when international economics were so grim. Under the circumstances, the license fee settlement we accepted a few months a go was not all that bad."