Virgin Media O2 poised to cut thousands of jobs

The BBC reported that Virgin Media 02 has not finalised the number of roles to be cut, but it is likely to be a sizeable proportion of its 16,000-strong workforce. Sky News reported that as many as 4,000 jobs are likely to be affected.

Virgin Media 02, which is jointly owned by Liberty Global and Telefónica, has billions in debt on its balance sheet and is facing competition from an increasing number of smaller broadband providers as well as giants like BT, which recently agreed a deal to acquire rival TalkTalk.

The company expects to deliver cost savings at an annual run-rate of approximately £800m by 2029, with around £400m delivered in 2027. Approximately £300m of the 2029 run-rate saving is expected to come from a reduced workforce, which equates to roughly 30% of the company’s total people costs over the next two years.

According to Virgin Media O2, the majority of the reduction is coming from non-customer-facing roles and senior leadership roles. This includes Executive Committee changes and the bringing together of the previous commercial and operations areas of the business under Consumer CEO, Lyssa McGowan. Other cost measures will include reducing the use of contractors, simplifying supplier relationships and supply chain and reviewing technology licences.

The company also expects a greater use of AI tools and digital channels to drive efficiency, productivity and better customer experience. This includes deployments in: customer service; network planning and fault management; and the personalisation of commercial offers.

The complete plan will be detailed at a strategic update around the time of the company’s full-year results.

Prospect, a union which represents Virgin Media O2 staff, said the cuts were "disappointing and very unsettling".

The cuts will add to significant layoffs at BT Group and Vodafone Three as telecoms operators seek to become more efficient amid rising cost pressures.

Sky, a competitor to Virgin Media 02 in providing broadband and pay-television services, also cut hundreds of jobs in September last year.

Lutz Schüler, CEO, Virgin Media O2, said: “The direction we’re setting today paves the way for the next chapter of Virgin Media O2: a company that will be leaner, clearer on priorities, and faster in delivery, with brilliant brands and an unwavering focus to get back to what really makes a difference to our customers. 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, and for those staying we will work differently, but as one team, to get back to winning again. Virgin Media O2 must evolve, and the action needed to make that happen starts now.”

Virgin Media recently created its own AI robots to monitor its television network quality in real-time in a bid to quickly identify and resolve any issues when they occur. Discover more here.