The BBC will lay off 500 more staff members by March 2026 in a bid to become a “leaner, more agile organization” as its annual report tells a tale of financial difficulty for the U.K. broadcaster.

The service’s license fee, the annual TV tax that Britons pay, which accounts for 65 percent of the BBC’s total budget, generated 30 percent more income in 2010/11 than it does today, a difference of over £1 billion a year. In a bid to make further savings and under significant funding pressure, 500 roles in public service roles are to be cut.

The BBC’s headcount is down by 10 percent in the last five years, a reduction of almost 2,000 roles, and a voluntary redundancy scheme has launched today. “Over the course of the next two years, we will look to further move the money we have into the priority areas that provide real value for audiences,” the BBC said. “This means, in public service, we will close and transfer roles in some areas, and create roles in growth areas.”

The news came as BBC Commercial, the broadcaster’s commercial arm, reported lower fiscal-year results but its CEO Tom Fussell touted such hits as Bluey and Baby Reindeer, as well as areas of upside.

The operating deficit of the BBC has increased by more than a third to £263 million ($340 million), its annual report said, and is projected to nearly double to £492 million by this time next year. The company’s chief operating officer Leigh Tavaziva said the government’s decision to increase the license fee to a number not quite matching inflationary standards prompted a “significant funding impact.” The new Labour government, led by Keir Starmer, has vowed his Cabinet is committed to the annual fee of £169.50 ($219). Its renewal will be up for debate in 2027. “Under these funding pressures and to ensure we can deliver on both our strategic transformation whilst offering outstanding value for all audiences, we have continued to focus on a substantial saving and reinvestment plan.”

The report noted that 95 percent of U.K. adults use BBC services, on average, per month, and 35 million came to the BBC every day across 2023/24. It highlighted Doctor Who, Planet Earth III, Ghosts and The Traitors as particularly popular programs while describing BBC Radio 2 as the country’s “number one station overall.” The company’s acquisition of streaming service Britbox International will, the BBC hopes, generate additional returns and double the commercial business by 2027/28.

The service is currently on track to exceed its £700 million ($904 million) spending target outside of London, with over 54 percent of its workforce now based outside of the capital. BBC Studios, however, saw a decline in its sales numbers from last year. The BBC said it was “a solid year of performance” despite “challenging trading conditions,” with the report adding: “An increase to our borrowing limits has kickstarted further investment and the recent acquisition of streaming service BritBox International demonstrates our sustainable future growth plans.”

The BBC is aiming to double its commercial business by 2027/28 to generate additional content and funding for the service, but acknowledged that licenses in force have declined by 2 percent year-over-year. Progress was made towards the BBC’s Diversity and Inclusion targets for the year, the report also said.

BBC director-general Tim Davie commented: “As we look to the future, we want to focus on the critical benefits we can offer the public and the U.K. as a whole, and help shape the new era of technological change for the good of all.”