ITV has begun consulting staff over fresh job losses as it prepares to outline deeper cost savings alongside lower half-year profits this week.

The broadcaster, battling with a poor advertising market, is cutting posts at The London Studios, where it produces shows such as Ant & Dec’s Saturday Night Takeaway.

The move is the first fruit of a review by the Boston Consulting Group (BCG), drafted in to assess efficiency at ITV’s content and commercial divisions.

BCG’s findings are expected to translate into job cuts, which analysts say could reduce ITV’s 6,000-strong headcount by 10%, affecting staff in production and advertising sales.

However, it is too early for Michael Grade, ITV’s chairman, to give a final jobs number this week. Instead he will announce another cost-savings target to follow on from the £41m to be squeezed from the business by the end of 2008. Another £40m will be saved next year as ITV cuts back its regional news output.

Numis Securities predicts half-year pre-tax profits will fall to £85m from £105m last year. ITV has been hit by higher sport costs after paying for the rights to the Euro 2008 football tournament, lower income from premium-rate phone-ins and weak advertising.

Lorna Tilbian at Numis thinks that ITV1’s net advertising revenue will fall 8% in the second half of the year as the advertising outlook deteriorates. Some 20% of the channel’s income comes from retail, which has been hard hit by lower consumer spending. ITV is still outperforming the wider television market, however.

Unions expect to hear more on job losses by September. Consultations are going on with the Bectu broadcasting union in Leeds and Manchester, where ITV’s studio joint venture with the BBC is being scaled back.

ITV’s shares closed at 42Çp last week, valuing the broadcaster at just under £1.7 billion. At this price, it is likely to drop out of the FTSE 100 at the next quarterly reshuffle in September.

One move that would pep up its price is the sale of a 17.9% stake owned by BSkyB, the satellite broadcaster 39% owned by News Corporation, parent company of The Sunday Times.

The US hedge fund Silver Point Capital, Big Brother producer Endemol and Israeli investor Haim Saban are all interested in acquiring the holding.

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