The BBC is to cut more than 1,000 jobs, including many managerial roles, because of a £150 million shortfall in its licence fee income as more people watch programmes online.
Director general Tony Hall told staff that an increasing number of people do not watch live television, so do not need to pay the licence fee.
The cuts were announced as industry regulator Ofcom revealed that only half of young people watch live TV, with many preferring online services despite the value placed on public service broadcasters (PSB) by the public.
Ofcom's third review examining how the BBC, ITV, STV, UTV, Channel 4, Channel 5 and S4C have fulfilled the purposes of public service broadcasting found they continue to make a "significant contribution" to UK broadcasting.
Over half of TV viewing is to the main PSB channels, rising to 70% when extra channels such as Plus One are included.
But only half of 16 to 24-year-olds watch live TV amid the increasing popularity of services such as Netflix, Amazon Instant Video and BBC iPlayer, said the report.
The BBC announcement means that three layers of management will be cut, while some of the BBC's divisions will be reduced.
The jobs are mainly going in professional and support services amid moves to cut back on duplication of roles.
Tony Hall said: "A simpler, leaner, BBC is the right thing to do and it can also help us meet the financial challenges we face.
"We've already significantly cut the costs of running the BBC, but in times of very tough choices we need to focus on what really matters - delivering outstanding programmes and content for all our audiences."
The BBC said the changes to the structure and organisation will make it "simpler, leaner and more effective".
The corporation has already taken measures to make £1.5 billion of savings a year by 2017, mainly through cutting administration and property costs, pay and jobs as well as shared sports rights.
"Despite the progress already made, and the realities of the licence fee being frozen for seven years, a new financial challenge means additional savings must now be found.
"The licence fee income in 2016/17 is now forecast to be £150 million less than it was expected to be in 2011. This is because as more people use iPlayer, mobiles and online catch-up, the number of households owning televisions is falling. It also provides further evidence of the need for the licence fee to be modernised to cover digital services," said a BBC statement.
The new cuts will deliver savings of £50 million through merging divisions, cutting down management layers and improving processes, said the corporation.
The BBC said the proposed steps will be:
:: To reduce the number of divisions. First by joining up technology teams across digital, engineering and worldwide. Further changes are also possible.
:: To reduce the number of layers from the top to the bottom of the organisation. In some places there are currently 10 layers of people and management and this will be cut to a maximum of seven in the future.
:: To reduce management roles in all areas of the BBC. A simpler organisation will "inevitably" require fewer managers, especially at senior levels.
:: To simplify and standardise procedures across the BBC, particularly looking at how professional and support areas such as marketing and communication, finance, HR, IT support and legal are structured and can be simplified.
Gerry Morrissey, general secretary of the broadcasting workers' union Bectu noted that the cuts would only achieve a third of the savings the BBC wants to achieve.
"We support the idea of standardisation and simplification, but we will have to study the details of the announcement," he told the Press Association.
"We want to make sure that anyone affected by this is genuinely redeployed."
Sharon White, Ofcom's chief executive, said: "Public service broadcasting continues to deliver TV that is enjoyed and valued by millions of viewers across the UK.
"More people are watching online or on demand, and this presents challenges as well as opportunities for public service broadcasters.
"They must continue to find new ways of connecting with audiences, and the PSB system needs to evolve to ensure it remains effective in the digital age."