Thousands of Virgin Media O2 staff face redundancy risk as the broadband provider grapples with billions of pounds in debt and tougher competition from BT and smaller providers. Sky News reports that most affected staff will be in non-customer-facing roles.
The BBC understands the number of roles to be cut has not been finalised, but is likely to be a sizeable chunk of VMO2's 16,000-strong workforce. The company's latest accounts put its total debt at £27.2bn.
The move comes as VMO2 faces fierce competition from cheaper altnets and BT, which recently won regulatory approval to acquire TalkTalk, a decision VMO2 strongly opposed. The company has also halted upgrades to its own fibre infrastructure and is reportedly close to a deal to use BT's network.
Prospect union, representing VMO2 staff, described the cuts as "disappointing and very unsettling". Deputy general secretary Noel McClean said the union is "committed to supporting our members through what is a difficult time" and will work with employers to explore ways to mitigate redundancies and ensure retraining and redeployment.
According to Sky News, most of the affected roles are in non-customer-facing areas, and several senior leadership changes are already underway. Sky News also reports that VMO2 is expected to review its use of contractors and suppliers as part of the savings.
The company is highly likely to announce on Tuesday that it will stop all investment in fibre, the BBC has been told. BT's share price jumped 7% on Friday after a Financial Times report.
Analysis
Why This Matters
- Thousands of jobs at risk at a major UK broadband provider.
- The cuts signal financial pressures on telecoms companies amid high debt and a competitive market.
- Potential shift to using BT's network could reshape the UK broadband landscape.
Background
Virgin Media O2 is a major UK telecoms firm formed from the merger of Virgin Media and O2. It has been carrying significant debt, with £27.2bn reported in June. The company has faced competition from smaller altnets and BT, and recently saw its attempt to buy altnet Netomonia blocked by the CMA, while BT's takeover of TalkTalk was approved.
Key Perspectives
VMO2: The company is implementing cost-saving measures including job cuts and halting fibre investment, but declined to comment publicly on the redundancies.
Prospect union: Deputy general secretary Noel McClean called the cuts "disappointing and very unsettling" and said the union is committed to supporting members and exploring ways to reduce job losses.
What to Watch
- Tuesday's announcement from VMO2 on whether it will stop fibre investment.
- The outcome of the review of contractors and suppliers.
- Any further regulatory responses or market shifts following the BT-TalkTalk deal.
Checked
12 claims in this story checked against 1 source: 11 supported.
Show each claim
- SupportedThousands of Virgin Media O2 staff face redundancy risk amid debt and tougher competition.BBC News: “Thousands of Virgin Media O2 staff face redundancy risk as the telecoms firm looks to save money in the face of billions of pounds of debt and tougher competition.”
- Partly supportedVMO2 is highly likely to announce it will stop all investment in fibre after halting upgrades to ease debt concerns.BBC News: “VMO2 was minded to go ahead with the plans after halting upgrades and expansion of its own infrastructure to ease concerns over its debt pile, the paper reported. The BBC has been told the deal is very close and that VMO2 is highly likely to announce it will stop all investment in fibre in its results on Tuesday.”
- SupportedVMO2's debt is £27.2bn, according to its latest accounts.BBC News: “As of 30 June, VMO2's total debt stands at £27.2bn while it holds assets worth £45.9bn, according to the firm's latest accounts.”
- SupportedThe number of roles to be cut has not been finalised and is likely to be a sizeable chunk of VMO2's 16,000-person workforce.BBC News: “The broadband provider has not finalised the number of roles to be cut but it is likely be a sizeable chunk of its 16,000 workforce, the BBC understands.”
- SupportedBT received regulatory permission to acquire TalkTalk, a move VMO2 strongly opposed.BBC News: “BT, which has been given regulatory permission to acquire rival TalkTalk, a move which VMO2 has firmly opposed.”
- SupportedVMO2 halted upgrades to its own fibre infrastructure and is reportedly close to a deal to use BT's network.BBC News: “On Friday, BT's share price jumped 7% after the Financial Times reported VMO2 was close to agreeing a deal to use its rival's fibre broadband network. VMO2 was minded to go ahead with the plans after halting upgrades and expansion of its own infrastructure”
- SupportedMost affected staff will be in non-customer-facing roles.BBC News: “According to Sky News, the majority of the affected staff, external will be in non-customer facing roles”
- SupportedProspect described the cuts as “disappointing and very unsettling.”BBC News: “The Prospect union, which represents VMO2 staff, said the cuts were "disappointing and very unsettling".”
- SupportedDeputy general secretary Noel McClean said the union was committed to supporting members and would work with employers on mitigating redundancies, retraining and redeployment.BBC News: “Deputy general secretary Noel McClean said it is "committed to supporting our members through what is a difficult time, as well as also working with employers to explore ways to mitigate the number of redundancies and ensure retraining and redeployment of staff affected".”
- SupportedSeveral senior leadership changes are already underway.BBC News: “According to Sky News, the majority of the affected staff, external will be in non-customer facing roles and a number of senior leadership changes are already under way.”
- SupportedVMO2 is expected to review its use of contractors and suppliers as part of its savings measures.BBC News: “Sky News also reports that WMO2 is expected to review its use of contractors and suppliers as part of the cost-saving measures.”
- SupportedBT's share price jumped 7% on Friday after a Financial Times report.BBC News: “On Friday, BT's share price jumped 7% after the Financial Times reported VMO2 was close to agreeing a deal”