Broadband Operator CityFibre Puts 400 UK Staff on Redundancy Notice
Network operator CityFibre, which have already deployed their 10Gbps capable full fibre (FTTP) broadband ISP network to cover 4.7 million UK premises (4.5m RFS), has today confirmed that over 400 roles – roughly a third of their workforce (1,400) – could be at risk of redundancy as part of their “shift [in] strategy from building to acquiring networks“.
The network operator, which has long aspired to reach up to 8 million UK premises (c.30% of the UK), previously cut a similar number of jobs during 2023 (here), which was then blamed on the UK’s “struggling” economy (i.e. causing rising costs for their business) and a later desire to focus on delivery of their Project Gigabit roll-out contracts with the Government – worth c.£860m in public subsidy.
Despite all that, CityFibre continues to carry a lot of debt (c.£3.7 billion net debt) and still faces many of the same pressures as other network operators (e.g. high interest rates, rising build costs and competition), which is why last year’s wholesale agreement with Sky Broadband (here) and the £2.3bn funding deal that followed was so crucial (here). The company’s latest results echo this and show a strong improvement in customer take-up.
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At the same time, the network operator has continued to talk loudly about their plans for future growth via network consolidation, which has already seen them acquire several smaller network operators (Lit Fibre, Connexin etc.) and there’s long been talk of major deals to follow (e.g. talks are understood to have taken place with several altnets, such as Netomnia). This now seems to be driving the latest round of redundancies.
A CityFibre spokesperson told ISPreview:
“CityFibre has achieved a lot over the past decade, having built next-generation digital infrastructure to reach over 4.7 million UK premises and injecting much-needed competition and choice into the market. As we shift our strategy from building to acquiring networks, backed by our recent £2.3bn financing, the time is right to review how we operate so we are best placed to continue our success through this next phase of growth.
All of our people have helped to get CityFibre into a very strong position and we will support our teams as we take this step and ensure CityFibre becomes the long-term, sustainable competitor the UK needs.”
The operator has also informed ISPreview that these redundancies will not impact the delivery of their Project Gigabit broadband roll-out contracts with the government. A spokesperson said: “We remain committed to our role in Project Gigabit and will have the resources needed to deliver“. But that does suggest that their remaining commercial builds will be taking a backseat in favour of growth via consolidation.
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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Spoke to us for 10 minutes about how well we’ve all done and how immensely proud of us the E-Team are of us for delivering Sky and then shoved notice on our heads. I survived the first round a few years ago, now I don’t know if I want to bother going through it again.
Should’ve seen it coming when the Goldman Sachs chap was put into the CEO role.
Sadly that happens in a lot of places, it happened where I work. You are doing a great job, but now we want to save money and will get stuff already made but frozen so just need chucking in the oven, so we won’t need the amount of people. so you have to apply for your job again.
It is the sad fact of the world, that we are just numbers and there are people above us that have a larger number, but can still suffer the same fate and have done.
I am sorry to hear that you may lose your job, it is the state of this country at the moment, with the government not helping by making employing people more expensive.
Joke of company. Wasted billions. Screwed over all thier partners just have Sky at the top of their list. Only decent person there is Richard Bridge.
Cutting 30% of jobs is not a good sign for the company. Numerous times there have been questions raised about the financial situation of the company, and them saying they are fine. But they are cutting soo many jobs at this point is obvious they aren’t fine. The main rumour is that they wildly underbid for sky and that the costs to get operational with sky far exceeded any revenue they were getting.
How long until Cityfibre declares bankruptcy?
Investors wouldn’t have put another £2.3bn in if they were not confident in the plan.
Today’s news will have been planned for a while and probably linked to that investment and recent CEO change.
They’ve wasted billions and need to get some better control around costs. Finally admitting they aren’t building anything new apart from Project Gigabit should have happened ages ago. You don’t need build teams if you’re no longer building.
I just feel sorry for the staff affected
Not necessarily. Openreach are also cutting a third of their workforce and they definitely aren’t going anywhere anytime soon. The switch away from being focused on build is inevitable for all network builders and that means they will have different workforce requirements. Not pleasant for the people losing their jobs but that’s the way it goes.
“Investors wouldn’t have put another £2.3bn in if they were not confident in the plan”. The alternative was not to put in more money, let them go bankrupt & lose all the money invested so far. It could be one or the other or maybe a bit of both. Never mind, Greg did alright by all accounts.
Its not 400 staff, they want to cut the head count by 450, more like 800+ have been put at notice.
So fibre is going the same way that cable did in the 90’s with individual localised builds, all consolidating into one large company who then control the infrastructure. Our alt-net, who we are with, Go Fibre, have their call centre a short distance away in Berwick upon Tweed, staffed with local people who have local knowledge. If they get taken over, we’ll end up speaking to someone in Reading or Romania who doesn’t have a clue about rural broadband
Friend, when you talk about a country, first get interested in documenting that country and then you can say something about that country.
Well, I’ve had fiber optics in my house since 2012 and you want to give us new lessons?
Maybe you missed this article!
https://www.ispreview.co.uk/index.php/2023/04/2023-full-fibre-country-ranking-sees-uk-coverage-accelerate-vs-eu39.html
Lol, many people in the UK, don’t realise that our FTTP rollout, stymied and delayed by Privatisation of BT / Openreach. Is nowhere, compared to many EU countries. In the UK, we have an utter mess, characterised by crazy Overbuild of City and Town areas by multiple, marginally profitable companies. And left behind Rural areas, that are waiting in vain for FTTP. It’s seems Privatisation and the profit motive has utterly failed UK citizens…
Please buy all points fibre and get the network open for business again .
Why would they want to acquire that mess, debt, and the cost of sorting it out?
Here here!
@Badwolf I share your pain. It would have better if Swish/All Points Fibre hadn’t come at all. At least it would have potentially left the way open for another network who knew what they were doing.
Painful but needed. The company is barely building anymore and said it will acquire. Investors more likely to do that if they are carrying less staff on the balance sheet. This should help them sweep up the other altnets.
CityFibre’s strategy of using cheap debt and equity funding for loss-making fibre builders for network buildouts can’t work any more. However altnets have mostly done their own buildouts, have no money and can’t get enough customers – so are ripe for takeovers by the likes of CityFibre.
The Altnet to be admired has now become the same as the rest, build and debt problems.
Absolute mess of a company heavily indebted and having to borrow more debt to pay the interest on existing loans. Inefficient operating model with fragmented systems that seem stuck together with sellotape – miles away from a low cost, efficient wholesaler.
I am sorry for all the people put at risk, unfortunately there are executive teams out there that just do not understand how to put together companies that work for the long term, and Cityfibre was certainly in that category – at least Simon seems to be grasping the nettle.
to be clear to everyone in the comments, these redundancies are not aimed at build, but as follows: Technical (Architecture & Engineering, Design)
Corporate & Commercial
Network Services (Customer FNO, NWB, Supply Chain)
Customer Assurance & Delivery
CDIO
there is a strong possibilty that field network operations, as a divison, will cease to exist.
The unfortunate reality is that all the roles you list (except FNO) are in some way related to build activity. Or on the IT side a restructure.
Reviewing OPEX as a business evolves is standard practice. Staying lean and keeping powder dry helps ensure resilience during downturns and positions the business to capitalise on opportunities when others pull back.
Very little scope to build out more the challenge is to drive up take up and the problem there is there are to many players in the market hence City Fibre moving to try to buy out the competition
The obvious point with consolidation is the amount of overbuild that exists. If the network you’re buying has 100,000 premises RFS but 80,000 of those are also in your existing footprint as well, then you’re not buying 100,000 potential customers, you’re only getting 20,000.
Factor in the cost of buying the whole network and incorporating into your setup, then it might very well be cheaper just to build to those 20,000 yourself and have the other altnet’s equipment get left to rot in the ground.
Obviously that’s an extreme and unlikely scenario, but consolidation isn’t the magic bullet Cityfibre seem to think it is. I certainly wouldn’t declare them to be the “winners” in the altnet farce. It’s still a long and very bumpy road to VM and OR actually having a truly national and stable competitor.
yep. In my area CF are not only overbuilt with another altnet, but CF has “better” infrastructure in that they didn’t just use Openreach PIA everywhere, they have their own ducting. I wonder how this will turn out for other altnets (who love to tout their lower cost per premise due to extensive PIA) over the longer term.
Consolidation was a valid strategy for the cable companies because the government had granted exclusive regional monopolies that prevented overlap. Not that NTL and Telewest had an easy time of it as the networks were not built to an identical specification and they had very little money to rectify it. Some parts of NTL’s network couldn’t get interactive TV or broadband for years because of this, and Virgin’s legacy landline network still has all sorts of weird differences depending on where you live.
The ideal takeover candidate has minimal overbuild with CF, is easy to incorporate into CF’s network, and is not in the 70% (minimum) of the country that CF has long pledged to ignore.
Good luck finding that.
“Good luck finding that”
@ed – I present to you Netomnia
Using the thinkbroadband map, you can actually see where altnets have built and which ones overlap. It’s like fitting a jigsaw together. Some altnets have no overlap. Some altnets have minor overlap. Other altnets have major overlap. CityFibre’s aquisitions will have to be targeted and strategic to bring on board the most amount of connected properties with minimal overlap.
Given their relative debt to premises passed ratios if I were Netomnia I would certainly be looking for a cash buyout.
I can’t see CityFibre doing any deal that doesn’t improve their income to debt ratio.
In Portsmouth, CF built whole core network in the centre of the city. Yet, when walking on eg. London Road having over 450 numbers, 20 connected premises is max…
How long has CityFibre been available there? It needs to have been at least 2 years before you can really get an idea of take up levels.
Take-up in established Cities is much higher.
Their take up now exceeds 20% across the country so your numbers are either wrong or an isolated example