Virgin Media O2 cuts thousands of jobs in £800 million savings drive
AI takes over customer service and network planning while fibre upgrade halts at 50 percent, debt of £22 billion stays on the books
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Virgin Media O2 hopes to reduce its employee wage bill by 30% over the next two years. Photograph: Jakub Porzycki/NurPhoto/Shutterstock
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Virgin Media O2 to cut thousands of jobs in huge cost savings overhaul
independent.co.uk
Virgin Media O2 is cutting thousands of jobs as part of an £800 million annual cost-saving programme, with roughly £300 million to come from the wage bill — a reduction of about 30 percent over two years, potentially a quarter of its 16,000-strong UK workforce. The telecoms group, jointly owned by Liberty Global and Telefónica, is carrying £22 billion in debt, and chief executive Lutz Schüler said standing still was not an option given market conditions, the fibre regulatory backdrop and technological change sweeping the economy.
The company did not specify how many roles will go, but most losses will fall on non-customer-facing functions — head office, IT and support — while it also trims contractors and renegotiates supplier contracts. The stated means are AI tools in customer service, network planning and fault management. Alongside the staffing cuts, VMO2 has halted investment in upgrading its network to full fibre beyond existing commitments; the upgrade stands at 50 percent complete. Rather than finishing the build, the company is negotiating wholesale access to rivals' infrastructure: it is close to a deal with BT's Openreach that would extend its footprint from 19 million to as many as 25 million homes. The cuts are to deliver £800 million in annual savings by 2029.
The pattern is familiar to anyone who has watched leveraged telecoms: a network that carries the country's connectivity becomes, in private-equity arithmetic, an asset to be sweated rather than extended. The fibre build stops where the regulatory commitments end; the savings land on employees and suppliers first, debt service and shareholder returns last. Meanwhile the same network is expected to underpin the AI infrastructure and digital services the industry lobbies governments to prioritise. Schüler promised a fuller strategic plan in the coming months and said the company would be leaner, clearer on priorities and faster in delivery.