Virgin Media O2 set to cut thousands of UK jobs as part of cost cutting
A new news report has this morning claimed that broadband and mobile giant Virgin Media and O2 (VMO2) are allegedly preparing to cut thousands of UK jobs. The somewhat expected move appears to form part of the company’s long rumoured c.£600m cost cutting drive to help ease pressure from their c.£22bn debt mountain and falling bond prices.
According to Sky News, “sources close to the company” have indicated that details of VMO2’s financial cost-reduction target will be revealed early next week as part of the operator’s latest quarterly results, although this is not currently expected to include a final figure in headcount terms. But some insiders reportedly expect that as many as 4,000 jobs could be axed.
Trade union officials at the Communications Workers Union (CWU) and Prospect are understood to have been briefed on some of the impending transformation plans. Changes are also expected for the company’s existing chain of contractors and suppliers as the operator looks to cut costs in other areas too. VMO2 has declined to comment.
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The development comes shortly after it was revealed that Virgin Media were looking to expand the reach of their full fibre broadband network by harnessing Openreach’s fibre, which also indicated that their existing network build and upgrade programmes could be shelved.
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on X (Twitter), Mastodon, Facebook, BlueSky, Threads.net and Linkedin.
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Q3 results are due 3rd Nov. I assume they’re not going to be good. BT H2 results two days later. Interesting times
I’m also not expecting good results from VMO2. In particular around consumer fixed line.
They haven’t seemed to fix the one fundamental issue, poor customer service and a lack of self service options. The latter of which is just feeding back into the first issue.
I can’t remember a single time I called VM customer service and had a query resolved without ringing several times and being passed around.
When Gigabit speeds became available elsewhere, I jumped providor. Last year nearly 140,000 others did the same.
Completely agree re: customer service at VMO2. The last time I rang, the foreign call centre assured me that they had “sent extra strong signals to the router” which would fix the issue. Needless to say, it was another six phone calls before an engineer was booked to fix the actual issue.
Thankfully Openreach GPON is now available, so we will be off when the contract is up.
So where is the £2 billion coming from for one of Virgin Media’s companies to buy Netomnia and Youfibre. So are they are going to load Netomnia with loads of debt then in the end just bring them under the VM brand name. Is that what the plan is. Come March my contract runs out with Youfibre, so I will be away from them as I don’t want to sign a new contract with this hanging over them. As they have moved to 2 years and I want nothing to do with Virgin Media full stop. The whole point of signing with Youfibre was to stay away from Virgin Media as we know what they are like customer services wise as well as downtime wise, but as Youfibre with be part of Virgin Media’s brand then no thank you.
From an investor (InfraVIA) who is currently being blocked to invest in the UK. No investment, no growth, no jobs…Who would have thought that it would be the outcome.
Don’t worry, you are safe, you can stay with us 🙂
Probably won’t happen now. I believe they are going to use Openreach’s FTTP network like hyperoptic do.
That has been explained a number of times. The money was to come from the new JV that controls the Nexfibre operation. The acquisition would have facilitated the release of to allow for further investment and to provide critical mass to the businesses.
Just get a new contract at the currently competitive pricing, and VM can’t change it as its a contract. At the end, if VM takes over you can decide to leave.
To the senior management at VMO2 as this is now in the news let’s get this done on Monday let’s not drag it out people will want to know where they stand . But knowing VMO2 this will get dragged out it’s like going back to the NTL days
I love to dump on VMO2 as much as the next person, but to be fair this is something that has been leaked. They will be trying to do this as fast as possible, but that takes time to plan and there is a long legal process to follow.
The business must be allowed to plan and respond to changing circumstances. I doubt they will be in a position to give the full story at this time.
No one seems to have been briefed on this internally as it has caused a big fuss this morning.
The unions have been briefed. However, the company has not made a formal announcement yet. That is the usual course of events.
What an absolute disgrace. Here you have top brass from VMO2 and Nexfibre online bashing the CMA and going on about CityFibres debt. While they try to bury competition and block a third network by buying Netomnia with their own workers wages as collateral. You couldn’t mark the CEOs neck with a blow torch.
Utter nonsense.
It is the government that has created the economic environment and has contributed to forcing increases in borrowing costs. These are the consequences, as are all the other tens of thousands of skilled jobs now being lost in the UK.
This thinking will lead to thousands of people losing their jobs…Time to stop thinking like that, real people are suffering now. This is a sad moment for the United Kingdom.
If the government wasn’t creating such a horrible environment then people would invest instead of leaving the country
Blaming CEOs who create jobs for barely keeping ships afloat helps no one. The situation has been awful for the past year with almost every company doing mass layoffs
Not sure why the comments are all blaming the government for the current economic situation, which has been in slow decline for a decade or more.
The government can’t be blamed for Iran, Russia or Gaza which has caused huge spikes in energy and trade costs.
We can’t really blame the government either when our employers decide to replace us with American AI bots.
Refocusing just on Telco, the government probably are to blame for creating, encouraging and not controlling a decade or more of wild-west infrastructure building in our streets and cities. Economically, this was never going to work and, practically, having multiple operators building closed private networks everywhere (exactly like VM do) is a wasteful allocation of resources. A true, open-access framework should have been offered so AltNets could build to a consistent design and actually deliver something useful at the end of it.
Way too late for that now.
Yes it can?
High energy costs is a direct consequence of horrible energy policy and insane taxes on energy on top of it.
The war could’ve ended if not for Boris Johnson
America having AI bots is a consequence of America being a free capitalist country with good energy policy where running any similar company is impossible in europe for many reasons including tax, bureaucracy, energy, etc
The gov decided to tax employment and make overall employment much more expensive. The unemployment will further balloon next year. Now this budget assured rents will go up further and investment will be even harder to come by
If not for the current model then people would still be stuck with slow internet speeds. unfortunately and again, cutting off the investment and even blocking company acquisitions is what will doom the sector
@Jeremy:
It is not “thinking”; it is simple economics.
If you think there is an alternative, try asking yourself a couple of simple questions. Such as: How much would it cost the government to subsidise these jobs each year? How would funding be provided?
All ISPs will just be resellers of Openreach and the few surviving Altnets in the future. Internet innovation in this country is over.
Between this and the Openreach deal, it seems like VM02 are admitting defeat because they can’t acquire Netomnia.
As explained in the article, the problem is £22 billion in debt and restless bond holders. They aren’t making 4000 people redundant to spite the CMA.
No, this has likely been on the cards since 2025.
Some teams have been made aware there is an announcement coming this week in the Product and Digital areas. We are expecting changes to our jobs.
What makes the mind boggle is why there are Virgin and O2 retail stores up and down the country in the 100s on a dying high streets. Just a change here would save them millions on staff costs and utilities! and then sell the assets off. Anyway we will soon find out.
Everything is being looked at. There is likely more to come.
The Digital team are atrocious though. Full of directors constantly chasing personal pet projects, while being unable to get the basics right.
Look at the state of the apps they have now brought in house and caused many issues with customers unable to log in. They also brought all acquisition and retention markering under the digital team, sacked loads of good people and gave jobs to their underqualified mates. And low and behold the business is struggling to acquire new customers and retain existing customers.
And every single big handset launch ends with the website going down instantly.
And last but not least, the director who runs the digital team is awful at his role and has surrounded himself with awful directors who are basically yes men.
The retail teams keep VMO2 afloat as the digital experience is just terrible.
The staff at VM02 must be exhausted with the constant rounds of job cuts. I have a friend who started with NTL in 1995 and has been through this wringer many times.
Their strategy has never led the market direction since the consolidation of the early cable networks. Now streaming is eating their content revenue, VoIP or pure play mobile is replacing landline for most (with O2 a mobile network laggard) and their once market leading headline coax speeds eclipsed by both alt-nets and now Openreach. What is their USP? If the network build is also stopping plus a brand which is rented so is not even a VM02 or Liberty Media asset, do they become a big reseller of others network(s) in more than half the country? Copying the TalkTalk business plan is not a wise move, but they do have a similar reputation for customer service already…
I think 4,000 figure is a bit on the low side, though it may only be for the period to the end of the financial year.
I feel for the staff who are constantly kept in the dark and end up having to find out what’s happening within the company by reading articles like these. There’s a constant sense of uncertainty, despite what the so-called ‘leaders’ would have you believe.
Having known and worked for VM for the last 15 years, the past two have been particularly frustrating. I know I’m not alone in feeling confused about the direction the company actually wants to take. So many poor decisions, constant changes of direction and unnecessary U-turns.
Ultimately, it comes down to a lack of strong leadership. The company appears to be riddled with poor decision-makers at the wheel, and it’s the people on the ground who are left dealing with the consequences.
Given that we found out when in store today that there’s plenty retail staff who were given 2 weeks to decide on “voluntary redundancy” when they were actually told they weren’t needed, this isn’t a surprise. I’m more surprised the cut to store staff didn’t hit the news. Absolutely shocking that they’re making retail worse for everyone. Maybe if they had spent the money on their mobile network they’d have the customers to pay for the upgrades and the staff.
I hope the CMA get their small violin out, between this and the “leak” of using Openreach FTTP because their deal isn’t going to get approved or without concessions, wah wah wah.
Do you want to borrow the big violin for all the people losing their jobs?! I understand that you may not like VMO2 but it has real consequences to a lot of people. The U.K. needs investment and jobs…We all started with this goal, not with Distress and Redundancies. Sad.
People have been losing their jobs in Telecoms since the late 90s, hardly something new and to be expected by all who enter this career path.
Wait, are you saying staff wouldn’t lose jobs by AI anyway????
It’s going on everywhere from BBC to Barclays and many others, and will accelerate. Getting Netomnia would not secure jobs.
In the industry myself, gone through scenario before it’s a harsh reality but what VM02 are doing to try twist the hand of UK Gov / CMA is desperation using peoples livelihood as leverage.
This is why BT is 18% up in October and Bonds of VMO2 are down the toilet…it is all a plot to twist the CMA or the worldwide financial market knows something we don’t.
gotta keep those profits up
Profits? They’re £27bn in debt.
Look at the news, everyone is shedding jobs like crazy since Rachel Reeves imposed additional taxes on employers. Redundancies at ASDA 1000 jobs, Sainsburys 3000 jobs, Premier Inn 3800 jobs, Jaguar land rover 4000 jobs, BBC 2000 jobs, Cityfibre 200 jobs, BP 4700 jobs, Sky 600 jobs, Amazon 16,000 global jobs, UK included. You literally cannot deny Rachel Reeves caused this bloodbath situation.
Indeed. NatWest: 1,000, Barclays: 4,000. Further afield: Atlassian: 10pc, Oracle: 21,000, Microsoft: 60,000. Even Central Governments have started with replacing staff with AI after the Netherlands announced 25,000 are to go.
Hope this sends a message to the CMA, that they shouldnt be approving the merger.
I actually feel sorry for VMo2, talktalk was snapped up under their feet by already too big BT. Then they’re blocked because VM has just a small 26% overlap with netomnia where vm fibre too.
It’s almost like they’ve not understood it would still be wholesaled and that could of been a commitment made.
Meanwhile VMo2 are billions in debt after investing billions into the country and now 1,000s could loose their jobs. If I was liberty global and Telefonica I’d be selling up and getting out of this country FAST.
People on here are quick to slate VMo2 but both sides have improved greatly over the last few years, o2s network has been transformed in some cities.
Don’t feel too sorry for them. VM02s foreign owned bosses still extract plenty of profits from our economy that are funnelled back to the US motherland to be enjoyed.
Regulars on here know that (BT) Ivor and I debate and disagree on various BT/Openreach stuff.
One thing I agree with him on, is when he said the TalkTalk was a different case, and would have prevented many (important) business circuits and residential being in complete mess if it collapsed and did not mean the tax payer being mugged yet again. It would have cost BT money to integrate a very different operation, but meant continuity for those customers, both business and residential.
This was a different desperation take-over after previous talks failed.
@FANNY ADAMS:
No, it is not. The acquisition of Netomnia is intended toachieve criticalmass in the size of the fibre network while freeing capital to invest in further renewals. This reduction in headcount will reflect the cutback in upgrades of the heritage network asset, which was likely on the cards from 2025.
Far2329Light, Have you been supping magical brew again?
My comments were on the TalkTalk situation that another posted commented on.
Is this part of the “ we will no longer invest , we will make 1000s “ redundant campaign, if we don’t get our way
This was likely going to happen whether the netomnia acquisition got the go-ahead or not. The ISPs no longer need roll-out and installation teams if the demand is low. It is more cost-effective to contract out that work.
Questions need to be asked about the legitimacy of these jobs cuts.
How often are these jobs actually repackaged under a supposedly different JD to try and get around the rules?
If it looks like a duck, sounds like a duck…
Sorry, not had sufficient caffeine yet… …JD?
Sorry – Job Description.
Why do questions need to be asked?
I feel for the staff but this was always going to happen. Years and years of mistreating customers with out of contract rises of up 300%, bad customer service and lack of investment on FTTP. The only way to get a decent deal with VM was to cancel and wait for customer retentions to call. Some years ago they had the fastest broadband speeds and a good TV platform (TIVO). Now it’s all IPTV streaming and everyone’s else has faster speeds, much lower latency, faster upload speeds (or even symmetric connections), no congestion, no constant disconnections and cheaper prices. And most of the other networks have better customer services. While BT sat on their laurels for long at least they had the vision to see the treat of Altnets and go full speed on their FTTP upgrade. VM should have done the same and while they will still have a debt mountain to clear at least they would have been able to stop most customers leaving.
BT did not sit on its “laurels”. It was waiting for demand in the market to grow to the point where the investment would make a return.
Cityfibre, and then Altnets forced BT/Openreach to act.
Until that happened, the attitude was sweat copper because they told us FTTC was fast enough (also protected their lucrative leased line business). Their idea of return was with no competition around.
Kudos that Openreach’s roll out is flying once they got started. They have had the fastest implementation of all (even if it is still GPON).
From a current employees perspective- find out on Saturday through the press that 25% of the workforce are going to lose their jobs due to the ineptitude of shareholders and Senior leadership team. 9.45 am on the Monday and not even an acknowledgment from Lutz or his team, let alone an apology. Shameful
After a full day, not even an acknowledgement from the senior leadership team to their employees, absolutely shameful.
The company must make the announcement of changes to shareholders first.
I feel for the staff and many former colleagues going through this uncertainty especially in the run up to Christmas.
The SLT have a lot to answer for in the decisions they have made over the last few years.
A lot of companies do just before Christmas, can feel like a revenge tactic to staff to a lot.
Normally, news is broken on a Friday so you ponder the news in your own time over weekend, not the company’s. Then you get staff meetings of pretty much what you already have been told repeated to you by some other senior stakeholder, until the next chunk of information lands in an email about the next phase, on a Friday afternoon. Rinse and repeat until end of the “transformation”.
Same SLT who years previous apologised for the last lot leaking out in the press before announced internally and said they would learn and do things different. Evidently not. No internal announcement today.
As a customer-facing member of staff at Virgin Media O2, I can say that even we’re finding ourselves nervous, yet all the bosses keep saying is “You’re safe for now”. Everyone’s safe until they’re not—what a Christmas gift!
Slightly unrelated, but maybe someone can explain why Grain are now building in places with Openreach FTTP, Virgin Media FTTP and CityFibre FTTP.
Claiming that job losses would not be happening if the CMA allowed the Virgin takeover of Netomnia is not credible. If the takeover is stopped, it will have actually saved Netomnia jobs. For now.
Virgin o2’s problem is it’s unsustainable debt, a debt that was freely entered into by Telefonica not so long ago.
All part of the Fibre Bubble!
@FANNY ADAMS:
Most companies still operate on a quarterly basis, so there are announcements of changes all year round.
It is worth noting that we have just had the Spring Budget. That will inform many business decisions in the coming weeks, not just those controlling household expenditure.