ATHENS, Greece (CNN) -- Thousands of people demonstrated outside the headquarters of Greece's state broadcaster Wednesday in protest over the government's sudden decision to suspend its activities as a budget-cutting move.

ERT's TV channels and radio services were pulled off the air overnight, although some employees have continued to broadcast via the Internet.

Most of those taking part in the peaceful protest outside ERT's Athens headquarters were employees, but others were ordinary Greeks who turned out in a show of support.

Some held banners that read, "All in the streets," urging fellow Greeks to join their cause.

Greek unions have said they will fight the decision, which comes as the country struggles with a debt mountain, soaring unemployment and a lengthy recession.

Government spokesman Simon Kedikoglou cited chronic corruption and mismanagement of funds as reasons why the broadcaster was closed down, at least temporarily.

"At a time when the Greek people are enduring sacrifices, there is no room for delay, hesitation or tolerance for sacred cows," Kedikoglou said in announcement shown on the broadcaster.

ERT has said the decision means 2,656 employees will lose their jobs.

To meet its commitments to its creditors -- the European Commission, European Central Bank and International Monetary Fund -- the Greek government has to dismiss 2,000 people from the wider public sector by the end of the year and 15,000 by the end of 2014.

Kedikoglou said a new television and radio broadcaster would open with a much smaller staff, with existing employees able to apply for new positions.

A "modern television and radio broadcaster will be established that will operate as soon as possible," he said.

An exact time frame for the new organization has not been announced, but a government spokesman said the new broadcaster should be operational before the end of the summer.

The General Secretariat of Information and Communication said the new state broadcaster would be called the Organization of Modern State Television.

The European Commission said Wednesday it had not sought the closure of ERT, "but nor does the Commission question the Greek Government's mandate to manage the public sector."

It added that the commission "supports the role of public broadcasting as an integral part of European democracy."

Reporters Without Borders expressed dismay over what it said was a "bizarre" decision by the government to shut down ERT's activities while carrying out the overhaul of its services.

"Greece has fallen almost 50 places in the past three years in the Reporters Without Borders press freedom index, a record fall in such a short period for a European Union member state," a statement said.

"The reasons include violence against reporters covering anti-austerity demonstrations, which goes completely unpunished, and threats against journalists and other news providers by the Golden Dawn party's neo-Nazis.

"Against this backdrop, the closure of ERT's TV stations has dealt a devastating blow to pluralism and freedom of information in Greece."

Reporters Without Borders' secretary-general, Christophe Deloire, is due to fly to Athens on Wednesday to meet with ERT employees.

Greek lawmakers agreed in April to cut thousands of government workers to secure another 8.8 billion euros ($11.5 billion) in international bailout funds.

Journalist Nathalie Savaricas reported from Athens, and CNN's Laura Smith-Spark wrote in London. CNN's Laura Perez Maestro and journalist Elinda Labropoulou contributed to this report.