BBC News Online: Business

ITV Digital to cut 550 jobs

Plymouth's ITV Digital call centre employs hundreds

The cuts, expected to effect 550 workers, will take effect in early 2002.

If implemented in full, it will leave a workforce of about 450 people at the Devon centre.

The ITV digital network, run jointly by Carlton and Granada, has been hit by falling advertising revenues and been plagued by poor reception in some areas.

Analysts have blamed heavy investment in ITV Digital for a recent sharp decline in profits at both Granada and Carlton.

Two weeks ago, Carlton said full-year profits were down by 40%, and announced plans to cut costs at ITV Digital by £45m a year.

Christmas reprieve

ITV Digital has so far cost its backers £800m and is expected to need a further £300m before it finally delivers a profit in 2003.

The company was launched under the name Ondigital in 1998, but changed its name to ITV Digital earlier this year.

The disconnection rate among ITV Digital subscribers is running at 23%, compared with just 12% at BSkyB.

The statutory 90-day consultation period means no jobs will go at ITV Digital before Christmas.

The service, intended to compete with cable and satellite television, has attracted about 1.2 million subscribers so far, but needs another 500,000 to break even.