Channel Five is axing a quarter of its workforce in the latest cuts in commercial broadcasting.

The telly firm says it will make 87 people redundant.

The job cuts come as part of a restructure which will merge several existing departments in a bid to reduce the TV firm's top heavy hierarchy.

Channel Five, ITV and Channel 4, are battling to balance the books in the face of a major advertising recession and the general economic downturn.

Earlier in the week ITV announced 600 job cuts, most of those coming at its Grays Inn Road headquarters.

Five’s Chair and Chief Executive, Dawn Airey, said:

"We are clearly in the midst of one of the most difficult financial environments in history; Five has therefore taken the necessary step to review all operations to ensure we continue to work as effectively and efficiently as possible."

Merge to survive?

As previously reported, one of the solutions suggested for overcoming Channel 4's financial woes was for it to merge with Five, a proposal that Five's German owners RTL are reportedly keen to consider.

ITV top man Michael Grade has suggested the merger of all three terrestrial commercial broadcasters to take on the BBC in the ratings war, and media majors like Sky in the battle for advertisers and sponsors.

Bosses at the state owned Channel 4, however, have been less enthusiastic about proposals it merge with its truly commercial rivals, preferring instead proposals they work more closely with the commercial division of the Beeb, BBC Worldwide.