Two popular radio shows will also be cancelled as BBC Scotland conducts major overhaul of its news output

BBC Scotland’s flagship current affairs programme, Scotland 2016, is being scrapped after less than three years on air as part of a major overhaul of its news coverage.

BBC executives in Glasgow are also taking two popular radio programmes off air, the weekly Big Debate and a Saturday morning business show, to plough greater resources into revamped core news programmes such as Reporting Scotland.

Scotland 2016 has struggled to compete against STV’s rival programme, Scotland Tonight, as well as BBC1, with average audiences falling to just 30,000 viewers a night. It will go off air later this year and be replaced by a one-hour weekly current affairs show, once BBC executives believe the new programme is ready to launch.

Gary Smith, BBC Scotland’s recently appointed head of news and current affairs, who was brought in after a newsroom revolt against his predecessor, told staff on Tuesday it had to adjust to cuts in funding, an increasing need for digital-only journalism and complaints from journalists they are overworked.

In a briefing circulated within BBC Scotland, Smith said: “We’ve become overstretched, with reductions in staffing over past years, but not in output. It’s time now to live within our means, and focus on our core programmes.”

Smith confirmed the BBC was also introducing a new Scottish edition of the BBC news website’s homepage – a Scotland-edited mix of Scottish, UK and international news signalled by director general Tony Hall as part of his charter-renewal strategy.

Corporation sources said this did not imply the BBC had decided whether or not to commission a “Scottish Six” national and international news programme to replace the UK network Six O’Clock News. That decision is not now expected for some time.

Smith added that BBC Scotland needed to invest more in digital journalism, making its output digital first, and increasing its social media reporting and online video, scrapping a daily live news blog.

Originally known as Scotland 2014, the half-hourly nightly programme was first broadcast early that year as BBC Scotland ramped up its news coverage before the Scottish independence referendum, replacing Newsnight on BBC2 in Scotland.

BBC executives lured Sarah Smith, the then Channel 4 News journalist and former More 4 News anchor, to host the show as it tried to respond to audience and political complaints that its news coverage in Scotland was too weak. Smith became the BBC’s first Scotland editor for its network news in November.

Smith told the Guardian that once Scotland 2016 goes off air, Newsnight will return in Scotland to the 10.30pm slot it has across the rest of the UK, running at full length on BBC Scotland for the first time since 1999.

For 15 years before Scotland 2014 was commissioned, Scottish viewers were given a dedicated 20-minute long segment nicknamed Newsnicht by its detractors and staff. That opt-out section was derided on air as “a dog’s breakfast” by Jeremy Paxman.

Research by the UK department for culture media and sport found earlier this year that Scottish audiences were the most unhappy of all BBC viewers, with deep-rooted dissatisfaction with programming, value for money and originality. BBC executives said they had recognised that “performance deficit” for some time.

Smith told the Guardian staff were pleased there was a “coherent strategy” for BBC Scotland. “Broadly, they’ve accepted this is a sensible and quite ambitious way forward,” he said.

“I have not done lots of tinkering, lots of little bits, but tried to pull things together in a coherent package which gives prominence to digital stuff as well. That’s where there’s a lot of potential audience growth for us as well.”