Prospect seeks to limit redundancies and secure retraining and redeployment as proposed cuts threaten a sizable share of Virgin Media O2's 16,000 staff, mainly in non-customer-facing roles. The company targets £800 million (about $1.1 billion) in annual savings by 2029 and a 30% cut to its wage bill.
Virgin Media O2 announced the planned cuts on 3 November as it seeks to improve profitability and reduce debt. Most losses will be in roles that do not deal directly with customers, the company said; it has not specified a final number of jobs to be cut.
The company targets £800 million (about $1.1 billion) in annual savings by 2029. Before the announcement, Virgin Media O2 declined to comment for the BBC’s November 1 report. Senior leadership changes were already under way.
The company had previously planned to upgrade its cable network to fiber and expand through an acquisition of broadband provider Netomnia. The UK competition regulator provisionally raised concerns about the deal; Virgin Media O2 has since halted full-fiber upgrades beyond its existing commitments with partners.
The wage-bill target is not a target for the share of employees losing their jobs. Virgin Media O2 said job cuts would account for £300 million (about $402.4 million) of its savings target, with the wage bill set to fall by 30% over two years, The Guardian said. The newspaper estimated that as many as 25% of the workforce could lose their jobs; that is not a company-confirmed figure.
The Guardian and BBC put the workforce at 16,000, while CNA put it at 15,000. The savings plan also includes using fewer contractors and reviewing suppliers and supply-chain contracts.
Virgin Media O2 also intends to increase its use of superintelligence (SI) tools in customer service, network planning and fault management.
Prospect, a union representing company staff, called the cuts disappointing and very unsettling. Deputy general secretary Noel McClean said the union would support members and work with employers to limit redundancies and secure retraining and redeployment.
The change from a stable outlook signals greater downgrade risk, not a lower rating. Fitch says weaker growth, worsening public finances and higher borrowing rates make reducing France’s debt pressures harder.
CEO Lutz Schüler said market conditions, fiber regulation and technological change meant the company could not continue with its previous approach. Virgin Media O2 is jointly owned by Liberty Global and Telefónica.
Virgin Media O2 was formed in June 2021 as a 50–50 joint venture combining Liberty Global’s Virgin Media and Telefónica’s O2 UK businesses.
Company accounts cited by the BBC put total debt at £27.2 billion (about $36.5 billion) and assets at £45.9 billion (about $61.6 billion) on 30 June. CNA separately put debt at £22 billion (about $29.5 billion), or 5.6 times annualized third-quarter core earnings.
The company faces competition from BT and cheaper alternative broadband networks including Hyperoptic, Community Fibre, Gigaclear and YouFibre. The Financial Times reported, according to the BBC, that Virgin Media O2 had halted infrastructure upgrades and expansion to ease concerns about its debt.
The company lost 23,300 fixed-line customers in the third quarter, leaving 5.5 million. In its latest results, revenue fell 5.7% to £2.4 billion (about $3.2 billion), while adjusted core earnings fell 2.6% to £995 million (about $1.3 billion).
Virgin Media O2 said market economics did not support three overlapping fiber networks. Instead, it plans to upgrade its existing cable network to offer 2Gbps services to most customers in 2027. That speed is measured in gigabits of data per second.
The company said any future fiber investment that makes strategic sense would be supported off its balance sheet and limited to areas without alternative broadband networks.
The company is also exploring wholesale arrangements that would let it offer services outside its own and nexfibre’s networks. Talks concern access to rival BT’s Openreach network; no agreement has been announced.
Liberty Global CEO Mike Fries said the regulator’s position on the proposed Netomnia acquisition had contributed to the investment halt. Nexfibre plans to challenge the regulator’s reasoning, and the regulator’s final decision on the deal is due in December.
The BBC reported that nexfibre, a joint venture owned by Virgin Media O2’s owners, proposed buying Netomnia for £2 billion. The regulator approved BT’s takeover of TalkTalk in October. Virgin Media O2 called that takeover a “stitch-up” that would let BT “tighten its grip” on the market; BT said the deal provided a safety net for TalkTalk customers because the provider faced collapse without it.
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