director-general Tim Davie is understood to have warned staff about job cuts after revealing the licence fee freeze will result in a £285million gap in funding.

Tim Davie, 54, reportedly told employees that the licence fee settlement, which will see the fee frozen at £159 for two years, would require the BBC to rethink its operational structure. 

 Nadine Dorries confirmed the licence fee would be frozen for two years, until 2024, after which it will rise in line with inflation for the following four years.

In an internal video conference, Mr Davie told staff that the headcount at the organisation would 'probably' get 'slightly smaller, according to . 

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

Tim Davie (pictured) reportedly told employees the BBC licence fee settlement, which will see the fee frozen at £159 for two years, would require the BBC to rethink its operational structure

BBC insiders are believed to have interpreted his comments as a warning about redundancies, while staff are said to be 'upset, frustrated and depressed'.

Mr Davie reportedly said that staff should expect further details in April, when the company's new financial year begins and the licence fee settlement is introduced. 

It comes after Mr Davie refused to rule out scrapping BBC Four and warned 'everything's on the agenda' after revealing the licence fee freeze will result in a £285million gap in funding for the corporation.

He said the income from the fee by 2027 will be about £4.2billion based on the corporation's assumptions around inflation and admitted that the settlement 'will affect our frontline output, there's no doubt about that'.

Mr Davie was asked whether BBC Four would survive, and said: 'I'm not going to make specific recommendations now, we are going to take stock, we've got the settlement - that gives us certainty now. 

'We will make clean decisions, what we need to do is just go through this year.

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Culture Secretary Nadine Dorries (pictured) confirmed the licence fee would be frozen for two years, until 2024, after which it will rise in line with inflation for the following four years 

While being interviewed on a prime-time 7.50am slot on BBC Radio 4's Today by Nick Robinson, Mr Davie was pressed on the future of BBC Four, BBC Two and Radio Five Live, and said: 'I think everything's on the agenda.'

Asked whether 'channels might go', he said: 'Absolutely'. 

Mr Davie added: 'People, clearly and rightly, are worried about what the £285million cut in terms of two years flat brings, but also, as an organisation, we need to reshape ourselves for a digital age.

The media market is moving extremely rapidly.'

Mr Davie said the corporation felt it was being 'listened to' but given the licence fee was set by politicians 'you are in the political swirl', and he expressed disappointment at the freeze, saying 'we would have liked to have seen an inflation rise throughout the period'. 

He told the Today programme: 'Our estimate is, and just to set this clearly for everyone, by the year 2027, the licence fee income will be about £4.2billion based on our assumptions around inflation.