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CityFibre Restructures to Keep UK FTTP Plan on Track – Cuts 400 Jobs UPDATE

Thursday, Feb 2nd, 2023 (7:24 am) - Score 19,224
CityFibre_trenching_engineers_fttp_build

CityFibre has reportedly begun a new restructuring process that could result in the loss of up to 400 jobs out of their 2,000 strong workforce. The operator has blamed this on the UK’s “struggling” economy (i.e. causing rising costs for their business) and the desire to keep their rollout of full fibre gigabit broadband on track.

At present CityFibre’s FTTP network, which is being sold via 36 different UK ISPs (TalkTalk, Vodafone, Giganet, Zen Internet etc.), aims to cover up to 8 million premises (funded by c.£2.4bn in equity and c.£4.9bn debt) – across over 285 cities, towns and villages (c.30% of the UK) – by the end of 2025 (here). So far they’ve already completed 2.5 million premises and are passing 22,000 premises per week.

However, no operator is immune to the current challenges (e.g. surging inflation, higher import costs etc.), which has triggered rising costs both in the supplier chain and internally (e.g. electricity, leases and so forth). Even major players like BT have had to cut jobs, while Openreach have updated their approach to build (here).

We first began to hear about this yesterday afternoon after a number of CityFibre’s staff informed us that they’d been notified about the new restructuring, which saw the operator begin a 6-month consultation period ahead of the expected redundancies. The situation has now been confirmed via the Telegraph (paywall).

Greg Mesch, CityFibre’s CEO, told staff:

“The UK’s economy is struggling, and this is affecting both the market and our customers. While our rollout is fully financed, these pressures only increase the importance of taking responsible financial and operational decisions. Realising a more efficient operating model requires us to act and structure ourselves differently. Sadly, this is likely to result in a reduction to our workforce.”

At the time of writing, we are still awaiting an official comment from the operator, not least with respect to whether any of this will have an impact upon their current FTTP rollout and targets. After all, an operator that plans to reach 8 million premises may ultimately need more staff, not less.

But we suspect that the biggest unknown may be in how the rising costs are impacting their civil engineering contractors, some of which are believed to be under a fair bit of strain. Not to mention that the UK’s market for full fibre has become aggressively competitive, with a wave of consolidation widely expected for the near future.

UPDATE 11:21am

We’ve had an official response from CityFibre, which you can see below. The operator also informed us that they currently have 2,300 staff and do indeed expect redundancies of around the 400 mark, but they also expect to create around 200 new roles and that in-turn suggests a net outcome of 200 job losses.

However, most importantly of all, they expect to see no impact on their rollout and the 8 million target. The operator is currently planning to build at least as much network this year as last, but to reach 8 million by the end of 2025 will require them to continue ramping up.

A CityFibre Spokesperson said:

“CityFibre’s rollout has now passed more than 2.5m homes and we’ve reached a build rate of over 1m homes a year. It’s now time for us to begin our transformation from a scale-up into a world-class network service provider, focused on maintaining steady network expansion and a consistent, high-quality service. This requires us to change the shape of our organisation as we move to a more efficient operating model for the long term.”

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Mark-Jackson
By Mark Jackson
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 and .
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Comments
44 Responses
  1. Avatar photo Wilson says:

    Seems wacky that they have 2k staff considering they don’t have their own ISP and use contractors to build..

    1. Avatar photo Aled says:

      Depends…is 2000 staff a lot in their game?

      I suppose BT Openreach have 35k plus, but that’s a whole different ballgame actually doing the physical work.

    2. Avatar photo M says:

      They do have an ISP for the business network. But also it’s a really weird thing to benchmark staff on? They run a national wholesale network and manage build to a million homes a year with all the procurement, fibre exchanges, design work, sales, marketing, account management, support, it systems ect that goes into that.

  2. Avatar photo Iain says:

    Such corporate speek from CityFibre. I don’t think firing 2000 people helps keep a plan on track.

    Regardless, condolences to the staff.

  3. Avatar photo Dan Will says:

    Whos firing 2000 staff? Read it again it says up to 400!

    No real surprise, they have been growing at a very fast rate and now would seem normal to look at the whole structure and I’m sure there is duplication within the business.

    1. Avatar photo Iain says:

      Oops, yeah, I misread 2000 which is their current number of staff.

      20% is still a significant reduction: it’s decimating, twice.

    2. Avatar photo Alex says:

      I’d say the opposite. Getting rid of almost a quarter of their staff when they had the advantage of building from scratch? You’d expect to find duplication in a much bigger business like BT that’s done lots of acquisitions and has legacy systems which breed inefficiency. Less so in an altnet that should be fresh and lean. This is really tough for people who were probably promised the world to join them.

  4. Avatar photo Clive peters says:

    I don’t think they foresaw the level of competition. We’re due to get at least 5 FTTP providers (including cityfibre)

  5. Avatar photo Depressed Cityfibre Worker says:

    The way they have gone about this is shocking for us staff.

    Business wise this makes sense but not out of the blue after months of saying everything is ok.

    1. Avatar photo John says:

      Redundant for the first time in your life? It is usually like that. “Everything is fine, we see the bright future…” etc. Then investors do the maths and say to CEO what is needed. But my favourite is “we are not going to make more redundancies”, which mean more are coming.

  6. Avatar photo Another depressed CF member of staff. says:

    The staff were promised the world, last year going to multiple conferences telling us we’re all going on a journey “together” even bringing in a sailor from a round the world boat race to tell us how working as a team is imperative.

    Now a long drawn out redundancy process where staff wont actually be leaving until May at the earliest, anxiety during the worst cost of living crisis we’ve faced shows the true colours of this company.

    1. Avatar photo A Third Depressed City Fibre Employee says:

      Couldnt agree more with the above, the fact that the business has made new hires in the last 6- 12 months knowing this is coming and then slapped this onto everyone is appalling.

      So shocking with all of the promises made and opportunities dangled in front of us.

      How can they expect everyone to feel when this is the hardest times of our lives at the moment with the cost of living, It’s all good and well telling higher powers they are safe with their magical wage but what about the little people? The ones who make the most impact to the business… who without wont have a business at all.

      100% makes us feel like were not cared for.

      Signing out.. one very grumpy CF employee.

    2. Avatar photo Jim says:

      How do you expect them to do it? They don’t make these decisions for the fun of it.
      Sounds like (like most companies) they’ve had to make a tough decision and cut jobs. Rather than risk collapsing as a whole where 2000 jobs would be impacted, they’re cutting 400.

      They’re damned if they do, damned if they don’t. If they tell you in advance, it’s an even longer drawn out process with longer periods of worry.

      They I’m sure have to follow a process which takes time unfortunately.

      I’m eager for them to keep going. Their service is better than Virgin’s and Openreach’s. Plus cheaper! (Although it was a bit of a farce getting the service installed – it was worth the hassle)

    3. Avatar photo Iain says:

      I’d say it’s pretty reasonable, Jim, for the staff to be frustrated that they’ve been lied to these past months. If things aren’t rosy, don’t lie to the staff and say they are rosy. Don’t lie to the staff and say they’re valued.

      Also, a hiring freeze months ago would have been more honest, than continuing to hire, and telling new hires they’re valued.

    4. Avatar photo another says:

      We’re in a right old Mesch

    5. Avatar photo Disposable Employee #400 says:

      Don’t forget the hundreds of thousands spent on the ‘world class’ rebrand to make us look like a children’s cartoon show.

      Millions in pay-outs for the board, redundancy for the ones actually doing the work.

      Don’t worry though – we’ve just got to ‘back each other’…straight out the door.

    6. Avatar photo LJ says:

      I feel sorry for anyone losing their job at this time. But if the market is really slowing down, it’s an unfortunate consequence.

      I will be moving to CityFibre in a few months when my contract runs out with my current provider. I hope they can bounce back as we need competition in the market.

  7. Avatar photo Teaspoon Vigilante says:

    I’m certain these redundancies are caused by all the teaspoons going missing from the Telford office.

  8. Avatar photo A Fourth, sat with the Fifth, Sixth and Seventh depressed CityFibre employees says:

    Fully agree with the comments above. The communications from above were degrading. They read a legal script with no emotions. After this they just leave us in a state of limbo for weeks,. There is no support from higher management as many of them are consultants who are closed out of the whole process.

    1. Avatar photo Andrew G says:

      I’ve spent my career in the world of big corporations subject to the sort of pressures CityFibre are reacting to, and I’ve been made redundant a good few times. The normal corporate process and fake “consultation” is always protracted and stressful, but I assure you that life goes on, you’ve got useful skills, this isn’t the end of the world. Accept that it is s**t, that there’s uncertainty, but try and have a new start mentality. Assume now that your role is going, polish your CV, get in the job market, use colleagues and friends to give advice on your CV or interview practice, apply for a couple of jobs that you can do but don’t really want as practice. The more positive you are, and the more effort you put into finding your next role then the better the outlook, and it avoids sitting around hoping that you will be retained. Don’t do that, take control – and don’t be put off by rejections, the numbers applying for good jobs are always high, not getting through isn’t a reflection on you, although if you don’t at least get a screening interview then there’s probably a mismatch between the role requirements and what your CV shows – rebuild your CV for each job, and ideally use their requirements as the structure, rather than a boring chronological career history, and against each requirement give a two line example of something you did that shows you have the capability. Now stop being depressed and find your next job!

    2. Avatar photo Steve Gould says:

      @Andrew G – I feel like printing your comment off and putting it on the wall. Very good advice. Anyone impacted by any sort of redundancy exercise, take note of these words.

  9. Avatar photo John says:

    Job losses are a lagging indicator for the recession that we’ve been in since July. City Fibre isn’t the first and won’t be the last. Google, Amazon and Facebook have already fired in the several thousands range

    Of course raising the business tax does not help in any way shape or form but that’s just a feature, we are in a controlled decay to collapse. According to polls we are heading towards a labour win, whose leader just said he prefers the world economic forum to his own country. Controlled govt, controlled opposition

    Interest rates being hiked also means that money is no longer free and companies with big debts will start feeling the pressure

  10. Avatar photo The Industry is about to implode. says:

    Very sad indeed for the staff at this time, given the huge cut backs by Telent and other T1 Contractors and the loss of Lightsource this week. They have impacted numerous build partners over the last 3 to 4 years, some of which have gone completely after having successful businesses and being promised the world about 8 years+ work ahead, which is all great if you have the competence to design a robust network and experienced individual’s to manage the rollout which CF Don’t have a lot off.

    Many Good Companies, Directors, Employees of those businesses and their sub contractors have gone, yes been re-employed elsewhere but made redundant several times more since the initial loss of employment. Its 400 jobs, but trust me, this is just the beginning as it will not get easier in 2023. I anticipate the loss of more big names, more redundancies in what is supposedly a buoyant industry. £32bn of infrastructure spend, no people, rates supposedly increasing but being diluted with spiralling costs and bad designs.

    We all want fast internet, but given the other bills, water, gas, electric and oil, broadband is not as important. To much overbuild, bad designs that don’t warrant good build practices and suck the life of a contractors cashflow.

    Watch this space, you will see Defect Liability periods extending to 24/48 months moving forward, thus getting more contractors into quicksand situations. If and when EV street charging takes off, the upgrading of electrical infrastructure, more intervention into Footways and Carriageways, these silly 7/3mm ducts will be crushed, cut and many outages for customers, lots of claims because at least 50%> is shallow then you add up the rest of the damages. Higher rates, don’t fix this problem, the boom came, which was great, but rather than lining up in an orderly fashion with a plan set down by Government, its was a bit like the grand national, shotgun start, lets go. This equals what you are seeing now.

    Granted the Ukraine War was never a factor, neither was COVID, but the industry is imploding at present and its only going to get worse in the weeks and months ahead. Very sad ending to what should have been boom times. Feel for the City Fibre guys being made redundant and to all those at LS and Telent.

    As someone in the industry for 35 years, my advice is look at an alternate industry moving forward, green, renewables etc, something that has a plan behind it.

    Openreach have this right, they have always had it right and they will still be here when many Altnets have gone.

  11. Avatar photo A.N.Other fed up CF employee says:

    Is there more to this, why restructure and cut jobs so early on in the build when it is only 25% of the way through it, 8 million homes build plan and cutting back already??, how can it stay on target with a reduced work force.

    1. Avatar photo The Industry is about to implode says:

      Of course there always is. They will acquire around 3m of that THP by buying other altnets in the next year or so, which will lead to further consolidation of CF workforce and that of those companies they acquire.

      Equally the uptake of customers will not be there due to saturation in the market currently. the reality is homeowners are less concerned about broadband today v other utility bills. Look at the Gas and Electric market, how many less known operators have collapsed due to the energy crisis, only to be taken over by bigger players = market consolidation and some stability to date. The same is playing out in the Telco market.

      You sign a deal with X for a few months then Y contacts you to say they now own your service as X went bust, and comfort you by increasing your bills because they can.

      It is quite simple maths really. CF have the cash to build, but not the numbers and never will have the numbers in my opinion that = an ROI back to their investors.

      There are apparently 135 altnets registered as of mid 2022, not all are building, but circa 23m homes in the UK, of which Openreach already pass all these homes with some form of service offering. It was never thought through properly.

  12. Avatar photo FibreBubble says:

    Borrowing is becoming more expensive and that will necessitate higher take up rates to pay for it. If you listen carefully you can hear the business plans dissolving with every interest rate rise.

  13. Avatar photo Another disposable CityFibre employee says:

    The way this business has gone about this whole situation is shocking. The treatment of staff has been appalling and the whole senior management team should feel ashamed of themselves. Emotionless, tone deaf and unjustified.

    “Be more challenger”… more like “be more calamity”

  14. Avatar photo The Provisioner says:

    City Fibre owns Enta.net which sells broadband, including on City Fibre’s network, I do believe.

  15. Avatar photo A CF Employer playing Devils Advocate says:

    Whilst I think the company has made a big mistake in the handling of this situation, especially when their main mantra is back ea h other! I do fundamentally agree it needed to happen.

    The company has grown so fast they just employed without a real strategy of who goes where and what their role really was. Concentrating on RFS continually which was probably at the detriment to other sides of the buisness

    By doing this it makes the company more streamlined and stops separate departments having different processes for the same end game and hopefully all working more collaboratively together.

    Also for context there had been a recruitment freeze since last October.

  16. Avatar photo Boohoo says:

    Everyone who gets made redundant thinks it’s a tragedy and unique to them. The entire tech industry is getting laid off left right and centre, but nobody bats an eyelid. Happens to cityfibre and the crying starts. They expect sympathy from others, but show none when it’s happening to other businesses. 800 people were let go in my company, I’m one of them, you all know these people are getting golden handshakes right? Don’t tell me they aren’t.

    1. Avatar photo ... says:

      Some people have never gone through this before.

      Everyone’s situation is different, people are buying 1st houses having children etc.

      Nobody is expecting more or less than anyone else, there are job cuts to thousands of people currently in all industries.

      But yesterdays news on a ISP news site was Cityfibre job cuts and people have the right to comment and be angry.

    2. Avatar photo Blame capitalism says:

      Are you Greg Mesch in disguise?

  17. Avatar photo Sidney Fibre says:

    I’ve been kept on but will be lighting a candle for my CF brothers and sisters who got let go

    It’s a bitter moment

  18. Avatar photo Tommy says:

    It looks like they outsource the rollout to PMK Engineering, but do they also outsource engineers for faults etc? Are engineers’ part of the 2300/1900 staff?

  19. Avatar photo Steve M says:

    Just a word or Warning ! Lots of my friends and collagues from Openreach and BT left to join City Fibre like me . Were no doubt going to lose our jobs . Promised everything and now we are going to have nothing . DO NOT GET TAKEN IN BY THEIR LIES !

  20. Avatar photo We are(not) in this together says:

    I am also in a role that is at risk.

    It don’t look good that we are scaling back our rollout when we are only 25% complete.. We were promised the world becoming part of the cityfibre “family” turns out we are just a number that keeps the company running.

    Seeing as cityfibre’s HR team couldn’t start a fire at a match factory it’s going to be an painfull and soul destroying few weeks.. but hey remember to back each other.. when you see each other looking for work on LinkedIn

  21. Avatar photo Perfect storm brewing... says:

    Sadly a perfect storm brewing…

    BT Openreach cutting prices, interest rates rising (not good when you have a debt of £4,900,000,000), unsustainable saturated market, increased overhead costs, slow customer up take, etc, etc.

    Things aren’t looking good.

    I really feel for people that will be losing their jobs at this difficult time, I guess they’re feeling misled by all the hype.

  22. Avatar photo Hung out to dry CF employee says:

    I have sat at my desk for the past 2 days since the announcement trying to work out how I feel. For me this is the 3rd consultation period I have been through in 2 years. So there’s an element of “been through this before, we’ll be fine” but there’s a huge feeling of betrayal. Mostly because, the roles they are making redundant (within my division, anyway) are roles they created recently as in, within the last 2 years to cope with “growing business”. I haven’t done the math but I wouldn’t be surprised if over 50% of the roles that are “at risk” will be less than 2 years old. And the 200 jobs they’ve created? Going to people who have been in their role for over 2 years meaning their cost of making these redundancies limited to say the least. Don’t get me wrong I understand why commercially a company would do this, but at least be honest and don’t hide behind the “back eachother” value. I, for one, do not feel very “backed”.

  23. Avatar photo Al MacD says:

    If only they could have got their act together a bit quicker, mounting plates on the poles outside our house for two years now, ducting installed. No fibre. They’ve now been over built by OPenreach and most of the street have taken that option. With Virgin media in the street as well, too little to late. If you want to bring money in you’ve actually got to offer a product not hot air. I would have taken their product over open reach any day but two years of missed income in most of Worthing.

  24. Avatar photo Roger_Gooner says:

    The expension of the network to cover up to eight million premises is part-funded by £4.9bn debt, being over two-thirds of the financing. The interest on this debt keeps increasing as the Bank of England has just raised the interest rate to 4% – which will cause lenders to raise their rates. In comparison the interest rate a year ago was 0.50%.

  25. Avatar photo Bigbangbarry says:

    It’s the start of the end for all a lot more. Remember when that happened before.. all the little franchise companies got gobbled up or went bang. Deja Vu. Won’t be the last.

  26. Avatar photo Soon to be ex employee says:

    It’s all getting a bit heated in here.

    I just want to wish everyone luck whether they go or end up staying. I’ve been through this before and know that the “wait and see” approach doesn’t always work out but it’s not the end of the world. It’s awful timing, but there are bigger and better opportunities out there to be found and if there’s one thing I’ve learned in my time with CF it’s that there are some truly great people and you’ll get through this and excel in whatever comes next.

    All the best. It was a pleasure whilst it lasted.

    1. Avatar photo Reading with popcorn says:

      So your saying all the teams of developers, IT support and other departments are in on this “bad build” and not great people,

    2. Avatar photo Soon to be ex employee says:

      I thought I was clearly addressing my post at the people who, like me, are likely going to end up out of a job on the back of this. The vast majority of these people put a lot of care, attention, and effort into their work.

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