MUMBAI: TV18 will cut 12 per cent of its permanent staff and merge the broadcast operations of its two business news channels, a clear sign that news channels need to take corrective measures amid slowdown in advertising revenues.

The company will also use Rs 3 billion out of its proposed Rs 5.1 billion rights issue to retire part of its debt.

The twin steps will result in a cost saving of Rs 650 million annually.

"Around 205 jobs are gone, but senior editorial staff have been retained," a source said.

TV18 will merge the logistics, back-end and broadcast operations of the two channels - CNBC TV18 and CNBC Awaaz - coinciding with the completion of 10 years of CNBC TV18 and five years of CNBC Awaaz as stand-alone operations.

Network18 Group CEO Haresh Chawla said, “It is our belief that the next stage of growth and profitability of our business news operations will come from a more synergistic entity that combines the strength of two powerful and complementary brands. TV18 has already embarked on a path to financial restructuring as mentioned in the rights issue offer. Both these moves put together will make TV18 more robust in operating as well as financial terms.”

The company explained that the channels will continue to maintain their distinct identities. Only some of the over-lapping and common operations at the back-end are being merged. The company expects to optimise approximately 20 per cent in annual operating costs via this restructuring.

TV18 said that these moves will help the company return to better operating margins and profitability. The company will take a one-time extraordinary restructuring charge in the current quarter, and the synergies are likely to result in savings from the next quarter.

Shares of TV18 closed Friday at Rs 78.75, up 2.54 per cent.