Virgin Media O2 is planning a round of redundancies among its roughly 16,000 staff as it tries to rein in costs under a heavy debt load, with the company's total borrowings standing at £27.2 billion against £45.9 billion in assets as of June 30.
The company has not finalized the number of job cuts, but described it internally as "a sizeable chunk," concentrated in non-customer-facing roles; senior leadership changes are already underway, and the company says it will also review its use of contractors and outside suppliers. Virgin Media O2 declined to comment on the specific scale of the cuts.
Disappointing and very unsettling. We're committed to supporting our members through what is a difficult time... exploring ways to mitigate the number of redundancies.
Noel McClean, deputy general secretary, Prospect union
Fighting on two fronts
The cost-cutting comes as Virgin Media O2 fights BT's agreed takeover of TalkTalk, which it has called a "stitch-up" that would tighten BT's grip on the UK broadband market, while separately facing a Competition and Markets Authority review — due to conclude in December — of its own £2 billion purchase of fiber network builder Netomnia through its nexfibre joint venture. At the same time, the company is losing ground to a wave of smaller "altnet" fiber providers, including Hyperoptic, Community Fibre, Gigaclear and YouFibre, that have undercut it on price in parts of the country.
Shares in BT rose 7 percent on Friday after the Financial Times reported Virgin Media O2 is close to a deal to use BT's fiber network for some of its own broadband customers, a move that could let it scale back its own fiber investment; BT is due to report results Tuesday, when more details may emerge.
