Channel 4's chief executive today called for a "radical" overhaul of the TV station to keep its position as a leading broadcaster - but also warned it could mean staff cuts.

Mark Thompson, who took over earlier this year, said schedules needed to be revamped as well as the scale of the organisation, which recently recorded its first loss for a decade.

On-screen priorities will be its entertainment output and a "bold strategy" for drama.

Mr Thompson, formerly the BBC's director of television, outlined his plans in a briefing to staff shortly before a meeting of the Channel 4 board.

He said that with scarcer resources than many rivals, the channel had to "box clever" to compete.

He warned staff: "We've got a real fight on our hands. If we don't change the schedules, the way we work, the structure and scale of the organisation very radically indeed, we are not going to succeed."

Mr Thompson said Channel 4 would have to be "imaginative" and "tough" about reducing overheads to put more money on-screen and about making its programme budget "go further".

"It's going to be an exciting and positive time to be at the channel, but it's also going to be a bumpy time. Creating a leaner, less hierarchical Channel 4 will mean employing fewer people."

Last year Channel 4's programmes dominated awards shows with presenters such as Graham Norton the toast of the TV industry.

An advertising recession has been bad news for all commercial broadcasters, but Channel 4's boss revealed that improved revenue forecasts had allowed a further £8m to be added to programme budgets for this year.

It will be spent on improving output for younger viewers.

Mr Thompson pledged the channel would return to its power base as a risk-taking broadcaster.

"That subversive, bold, risk-taking spirit is there to be reawakened and could be stronger than ever. It's a spirit you can only really foster when you're small and fleet of foot," he said.