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BBC director-general Tim Davie is preparing staff for the prospects of job cuts in April, with the freezing of the licence fee forcing the corporation to be “prudent” in its financial planning.

The Times has reported that in an internal video conference, Davie said the BBC would "probably" have to reduce headcount slightly in the BBC’s next financial year, when the new settlement comes into force.

“I'm going to be blunt: we'd rather have slightly less people here, but properly funded and in the right place,” he said.

Freezing the licence fee for two years before an inflation rise up to the end of the current charter in 2027 – when culture secretary Nadine Dorries has indicated she would like to see it scrapped – will leave the BBC with a £285m funding shortfall.

Davie has said that “everything is on the agenda” when it comes to making cuts, including scrapping channels.

“We will make clean decisions, what we need to do is just go through this year,” he told staff. “We're being prudent in the way we plan our finances.”

Speaking on Radio 4’s Today programme this week, Davie said that any changes to the BBC’s size and shape was further pressured by market forces and consumer habits.

“We need to reshape ourselves for a digital age,” he said. “The media market is moving extremely rapidly.”

The government will further scrutinise the future of the BBC’s governance and regulation later this year, as part of the mid-charter review.

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