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The parent company of US government-funded Arabic language broadcaster Al Hurra has cut 160 jobs and is merging its Iraq channel after a 20% budget cut mandated by the US Congress, its CEO said in a note to staff.

"Today is a sad day. We’ve said goodbye today to 160 of our colleagues. We’ve reduced our workforce by 21%," MBN Acting President and CEO Dr. Jeffrey Gedmin said in a note to staff on Monday.

"The moves we are making are obligatory. Congressionally mandated budget cuts have forced us to reduce company costs by nearly $20 million," he said.

MBN comprises two satellite TV channels - Al Hurra and Al Hurra Iraq - as well as two radio stations and several websites.

Headquartered in the US state of Virginia, Al Hurra began broadcasting in February 2004 as part of a US effort to connect with audiences in the Middle East amid rising anti-American sentiment following the 2003 US invasion of Iraq.

It aims to "accurately represent America, Americans, and American policies," and engage in independent journalism, according to the MBN website.

MBN said it was merging Al Hurra Iraq with Al Hurra TV "to provide viewers with the best of both networks" and said "Iraq remains a priority — a vital part of the MBN region and ecosystem."

A company spokesperson said 30 of the staff laid off were in Iraq and 130 were in other parts of the region and the US.

MBN said it was moving away from a costly brick-and-mortar presence and would instead prioritise multimedia journalism by employees while exploring new technologies, such as artificial intelligence.