Virgin Media O2 cutting thousands of jobs in cost savings overhaul

Virgin Media O2 has confirmed plans to axe thousands of UK jobs under aims to slash costs by around £800 million a year by 2029 as it battles intense competition and a mounting debt pile.

The telecoms giant said the bulk of the cost savings – about £300 million – will come from job cuts among its 16,000-strong workforce in the UK, with aims to reduce its staff costs by around 30%.

It did not confirm how many roles will go, but said most of those affected would not be customer facing.

Details of the scale of the cost cutting came after weekend reports revealed jobs were under threat across the company.

The firm has already been cutting senior leadership positions and the overhaul is expected to largely focus on head office, IT and support functions.

It will also review its use of contractors and suppliers as part of the cost reductions.

The group said it would ramp up the use of artificial intelligence (AI) to “support faster decision-making and delivery”.

Lutz Schuler, chief executive Virgin Media O2, said: “Given the market conditions we face, the regulatory backdrop in fibre and the technological changes sweeping across all areas of the economy, standing still and doing what we’ve always done is not an option and while many of these decisions are tough, they are necessary for our future success and growth.

“While we will give a fuller update on the new strategic plan in the coming months, we are already progressing and making difficult decisions to prioritise investments and reduce costs which includes the size of our workforce.

“This is not something I take lightly but my commitment to our people is that for those leaving we will treat them fairly and with respect.”

Virgin Media O2, jointly owned by Liberty Global and Telefonica, said there were no plans to close any of its UK offices, which include sites in Paddington in London, Reading in Berkshire, Leeds, Manchester and Glasgow.

Half of the annual cost savings – £400 million – will be stripped out next year, with most affected workers to be told by February.

The group will give more details at the time of its full-year results in February.

Virgin Media O2 is struggling under a debt mountain of more than £22 billion and is also facing increasing competition from cheaper alt-net broadband providers as well as telecoms giant BT, which recently boosted its market share further with the emergency rescue takeover of TalkTalk.

Virgin Media said at the time that the TalkTalk deal was a “stitch-up masked as a rescue deal in the public interest”.

It is also facing competition scrutiny over plans by Nexfibre – a joint venture backed by Liberty Global and Telefonica, the co-owners of Virgin Media O2, as well as InfraVia Capital Partners – to buy alt-net Netomnia for £2 billion.