ABC journalists will be offered voluntary redundancy in the coming weeks as the broadcaster tries to absorb cuts handed down in the federal budget, managing director Mark Scott has confirmed.

Cuts of $120m over the next four years must be found after the early cancellation of a 10-year contract to run Australia Network by treasurer Joe Hockey.

But Scott told senate estimates that the ABC saw the reduction in funding as a cut to the broadcaster as a whole and meant job losses across the organisation.

“The Australia Network impact will have an impact on news that can be seen locally but will not have direct impact on news created in Australia," he said.

“We will lose some reporting positions in foreign bureaus on the back of the Australia Network decision … there will be reduction in news teams on back of that.”

He said the Melbourne ABC newsroom was partially funded with Australia Network money and voluntary redundancies would be offered in coming weeks.

Scott was also asked if he could guarantee there would be no cuts to children programs on the ABC, particularly to ABC3.

"The services we can provide and invest in depends on the funding envelope we are provided with,” he said

The department of foreign affairs and trade, which was in charge of the Australia Network contract, has given the ABC $6m to cover the costs of establishing the contract but Scott told the senate estimates it might not cover the costs of terminating it.

Scott said he could not guarantee there would be no cuts to programs or broadcasts at the ABC as he was still not sure what the broadcaster’s final funding envelope from the government will be over the next few years.

“We have found $40m of efficiencies, we will seek to find more, but sooner or later you reach the end of the efficiency run and the easiest levers to pull in budget cuts are programming cuts, and to cut a drama series and save millions of dollars with one decision is the easiest decision to make,” he said.

“... fundamentally I can’t give any guarantees until I have more of an understanding about what people are talking about when talking about down payment.”

Scott was also questioned over the ABC’s legal stoush with Australian newspaper columnist Chris Kenny over a depiction of him in a sexual act with a dog shown on a satirical program last year.

Kenny has brought a defamation act against the ABC and Scott apologised for the skit last month but Kenny is pursuing legal action.

Scott was asked why his apology took so long and he said it was because of the timeline of the internal review.