Virgin Media O2 Plans Thousands of Job Cuts in £800 Million Cost-Cutting Drive

Virgin Media O2, Britain’s second-largest broadband provider, plans to cut thousands of jobs as part of a cost-reduction drive. According to Sina Finance, the company plans to reduce employee costs by £300 million, or about 30% of the current total, by 2029, within an overall £800 million cost-cutting plan. It has about 16,000 employees but declined to disclose the specific number of positions to be cut. The plan is intended to ease investor concerns about the company’s £22 billion debt burden. This summer, its bonds sold off amid concerns that intense price competition among smaller fiber network operators was undermining its ability to repay debt. Virgin Media O2 is jointly owned by Liberty Global and Telefónica. Chief Executive Lutz Schüler said the difficult decisions were necessary for the company’s future success and growth. He said the market and regulatory environments for fiber networks, as well as technological changes across the economy, meant that maintaining the status quo and continuing to operate as before was no longer viable. A September report said shareholders were seeking to cut costs by hundreds of millions of pounds amid investor concerns about the company’s financial position. The cost-reduction plan was announced alongside Virgin Media O2’s third-quarter results. The company recorded a net loss of 23,000 broadband subscribers from July to September. It has lost more than 55,000 broadband customers so far this year, compared with 138,400 over the full previous year. A report last week said the company would cancel a planned cable-network upgrade, opting not to upgrade its existing network to newer fiber technology as it cuts spending. James Ratzer, an analyst at New Street Research, said the new cost-cutting measures were necessary in response to competitors and to maintain the company’s market position, given pressure on broadband pricing.