“The world needs the BBC more than ever. It might be a different size and shape. It’s not going to be a so-so Netflix or a me-too YouTube. It’s going to be a better BBC.”

That was the message Matt Brittin left ringing in the ears of BBC staff when concluding a town hall last month. The director general was attempting to lift the gloom after being beset with questions from anxious employees about job losses, service reductions, and general retrenchment.

He has an uneviable task. Brittin is grappling with a financial crisis that is precipitating some of the most painful cuts in the BBC’s history. He is also attempting to cement the BBC’s position as Britain’s premium media brand in an era of unprecedented competition.

These two objectives are not obviously compatible, but Brittin’s pitch to staff is that they are not incompatible. It’s why, when he announced the closure of linear networks BBC Three, BBC Scotland and Radio 4 Extra on Tuesday, he said the decisions were necessary to both “respond to immediate cost pressures and reinvent the BBC for a changing world.”

It’s not an easy sell to an unsettled workforce that is all too aware that worse is yet to come. The BBC must save £500 million ($670M) by 2028 after hemorrhaging more than two million licence fee payers since 2020. Despite relentless internal memos about layoffs and content cuts since the summer, the BBC has only announced £200M of its half-billion goal. In other words, it’s not even halfway through the cuts.

Closing BBC Three, BBC Scotland and Radio 4 Extra may seem substantial, but the reality is that switching off these services in spring 2027 will only save around £10M, according to two insiders. In the case of BBC Three, the network spectrum from which the channel broadcasts will continue to be an expense because it also houses CBBC, the children’s network that airs between 7AM and 7PM.

Deadline can reveal that BBC leaders did discuss merging CBBC with the corporation’s other children’s network, CBeebies. The BBC would have banked a more significant saving alongside the closure of BBC Three, but executives dismissed the idea because they did not wish to call into question the corporation’s commitment to kids’ public service media.

A senior insider, who spoke on condition of anonymity, said the closure of CBBC was deemed too “politically dangerous” when the BBC is negotiating its funding settlement and charter with the UK government. A second source added that Lisa Nandy believes BBC children’s services should be protected — perhaps unsurprising after her first visit to the BBC as culture secretary involved meeting Hacker T Dog, CBBC’s resident puppet.

BBC Sounds Under Threat?

That the BBC even contemplated CBBC’s future is revealing of the agonizing decisions facing Brittin as he attempts to put the broadcaster on a surer financial footing.

Speculation internally has turned to the future of another service: BBC Sounds, the radio and podcast streaming service launched in 2018. Deadline hears that the BBC has held tentative discussions about whether Sounds could be folded in with iPlayer to create a single streaming service for video and audio, not unlike Netflix and YouTube. A BBC insider said it is symptomatic of the BBC “having to dig much deeper and be more radical to find savings.”

Although no decisions have been made and Sounds is not under immediate threat, there are signals that point in this direction. During an internal all-staff call earlier this month, Brittin said he wanted iPlayer to be an “entertainment destination,” and asked Manon Dave, a product designer, to demonstrate a reimagined iPlayer where audio and video dovetailed. A further clue came this week, when BBC content chief Kate Phillips merged TV and audio commissioning teams in comedy and arts.

Somewhat counterintuitively, BBC Media Tech, the division that powers online platforms, is among the hardest hit by the cuts. The unit must save £102M by next year, but the talk is that a smaller team will focus on fewer products, which also fits with the emerging narrative around a single streaming service.

The BBC has announced around 1,200 job cuts in recent months, which is 800 shy of its intended target. Some think the BBC could exceed 2,000 redundancies. Few are immune. On-screen presenters like health editor Hugh Pym are expected to leave the building as BBC News contributes at least £51M to the savings pot.

Staff morale is low amid the drip-drip of redundancy announcements, which follows the BBC’s workforce contracting by 10% since 2020. The BBC is also navigating fraught negotiations over a staff pay deal, with the corporation infuriating unions by bundling in changes to terms and conditions, such as curbing cab usage for night shift workers. Many think industrial action is likely.

“There’s a lot of anger and bitterness,” said one insider. “If we all took work-to-rule [industrial action] and refused to do overtime, and turned our phones off for our lunch break, it would cause them a real headache.” Another spoke of a “f**k it feeling” internally: “The longer cuts get drawn out, the more uncertain everything feels. You think, God, do I really want to be sticking around for whatever this might end up being?”

A former Google executive, Brittin is trying to inject more Silicon Valley spirit and speed into the BBC’s culture. He is known to be disarmingly direct in meetings, unapologetically taking team members to task if they do not support their assumptions with audience data. “I’d like us to celebrate activity less, and outcomes more,” he told colleagues this month.

BBC Three Not Mourned

The closure of BBC Three, BBC Scotland, and Radio 4 Extra has not provoked significant backlash. When BBC Three was first taken off air in 2016, campaigners rallied to save the channel and two producers, Hat Trick boss Jimmy Mulville and Avalon co-founder Jon Thoday, made a serious offer to acquire the network. A decade on, Thoday is unmoved by the switch-off.

“I don’t think the BBC should have got rid of BBC Three in the first place. I don’t think they should have brought it back in the second place. And I’m not going to lose any sleep over them getting rid of it now,” said Thoday, who produces HBO’s Last Week Tonight with John Oliver.

“All I hope is that the cancelation of BBC Three for the second time results in the BBC increasing its spend on content for young people. It’s really important that the BBC increases and leads on comedy investment and lets comedy bring young viewers to the BBC.”

A former BBC executive added that the “terrible” decision to reinstate the channel in 2022 had harmed BBC Three, which was hit by low linear ratings for flagship shows. “It killed it,” they said. RuPaul’s Drag Race UK, The Rap Game and I Kissed a Girl/Boy have all been cancelled recently, meaning there is space for a creative refresh of the brand on iPlayer. The BBC has committed to increasing investment for younger audiences, but offered no detail on the value and scope of this ambition.

Perhaps the most ominous thing for the BBC is that it is not in control of what comes next. Funding talks with the government are progressing slowly, despite Westminster press briefings about enthusiasm for a so-called “Netflix tax,” which would involve charging consumers extra for subscription streaming services to help pay for the BBC. Ministers like this idea, and the BBC has not dismissed the solution, but there are those at the corporation who are skeptical that it will solve its funding crisis.

The protracted talks leave the BBC with no visibility over its finances beyond the end of next year, an extraordinary situation for any organization that relies on £3.9 billion of public income. The BBC expects the government to publish its policy position before the end of the year. As director-general Matt Brittin looks to forge a “sovereign” streaming service from a smaller BBC, clarity can’t come soon enough.