London: Virgin Media O2 is planning thousands of job cuts as part of an £800 million cost-reduction programme aimed at addressing its £22 billion debt and improving its financial position.
VMO2, jointly owned by Liberty Global and Telefónica, stated that £300 million of the targeted savings would come from reducing employee costs. The move is expected to lower the company’s wage bill by 30 per cent over the next two years.
Although Virgin Media O2 has not confirmed the exact number of positions affected, the proposed reduction could involve up to a quarter of its 16,000-strong workforce. Most of the job losses are expected to affect non-customer-facing roles.
The telecommunications company also plans to increase its use of artificial intelligence across several operations, including customer service, network planning and fault management.
Virgin Media O2 Chief Executive Lutz Schüler stated that the company was already making difficult decisions to prioritise investments and reduce expenses, including the size of its workforce. The Chief noted that the company needed to evolve to support its future growth and that continuing with existing business practices was no longer an option.
The restructuring programme is expected to generate annual savings of £800 million by 2029. Other measures include reducing reliance on contractors and reviewing supplier arrangements and supply chain agreements.
As part of its efforts to control spending, Virgin Media O2 has also decided to pause further investment in upgrading its network to full fibre beyond existing commitments with partners. The upgrade programme is currently around 50 percent complete.
Instead, the company plans a lower-cost network improvement programme, targeting speeds of up to 2Gbps across most areas that have not yet transitioned to full fibre by the end of 2027.
VMO2 is also exploring wholesale partnerships to extend its services into areas beyond its existing network coverage. The company confirmed that discussions with BT’s Openreach are progressing towards a potential agreement that could increase its network reach from 19 million to as many as 25 million homes.
The telecommunications provider is also reviewing its shareholder dividend arrangements and considering changes to cash distributions this year. It expects to incur restructuring expenses of approximately £250 million as part of the programme.
The announcement coincided with the release of Virgin Media O2’s latest financial results, which showed a decline in its customer base. The company lost 23,300 broadband customers and 7,800 consumer mobile customers in the three months ending September.
The restructuring comes amid wider competition and consolidation in the UK’s telecommunications industry. Earlier this month, Virgin Media O2 criticised the decision to accelerate BT’s £400 million rescue of TalkTalk.
MOST READ | NHS introduces early warning system for sick children
