Virgin Media O2 has unveiled its plan to cut 2,000 jobs as both fixed and mobile customers are also leaving the company.
In late June, reports emerged indicating that the cable company was considering a round of redundancies, with estimates ranging between 800 and 2,000 job cuts. Earlier this year, the Communication Workers Union (CWU) engaged in talks with VMO2 about the future of 1,357 positions considered to be at risk.
The company has now confirmed that these positions, and others, are indeed at risk. A spokesperson for VMO2 stated, “As we continue to integrate and transform as a company, we are currently consulting on proposals to simplify our operating model to better deliver for customers, which will see a reduction in some roles this year.”
The headcount at VMO2 has remained relatively stable since the merger between O2 and Virgin Media was completed in 2021. It is not unusual for redundancies to occur during integration as the company identifies and eliminates overlapping roles.
Independent telecommunications analyst, Paolo Pescatore, remarked that job cuts are an unfortunate consequence of mergers and predicted that if the proposed Vodafone and Three deal receives approval, there will likely be a reduction in the combined workforce.
The telecom sector in the UK is facing a gloomy outlook, with various companies, including BT and Vodafone, making significant job cuts. This trend is not exclusive to the telecom industry, as tech giants like Amazon, Google, Meta, and Microsoft have also implemented large-scale redundancies.
VMO2 plans to complete the job cuts by the end of the year. Some employees have already left, others are currently undergoing consultations, and some are yet to be informed.
The company is committed to supporting its employees during this period of change and is working closely with unions and internal employee representatives to discuss the future direction of the business.
The announcement of the job cuts coincided with VMO2’s second-quarter financial report, which also revealed a decline in customer numbers. The company lost 24,700 fixed-line customers compared to the end of the first quarter, which was attributed to price increases in April and May. Broadband customers saw a decrease of 15,300.
The postpaid mobile operation also experienced a decline of 1,500 customers due to higher prices. Additionally, VMO2’s total mobile subscriber base fell by 991,300 connections as MVNO Lyca Mobile switched from O2’s network to EE’s network.
Despite the challenges, VMO2 continued its gigabit network expansion, adding 175,500 premises in the second quarter. The total footprint now stands at 16.4 million, with plans to complete the upgrade from hybrid fibre coaxial (HFC) to FTTP by 2028.
On the mobile side, VMO2’s 5G network went live in an additional 2,800 towns and cities and is expected to cover 50% of the population by the end of the year.
Financially, the company reported a 6.2% year-on-year revenue growth to £2.71 billion, driven by the mobile sector, which experienced a sales growth of 4.7% due to price increases. This compensated for a 3.8% decline in the consumer fixed-line business, as customers reduced their spending on home phone use and TV packages.
Adjusted EBITDA increased by 4.6% to £1.02 billion, as price hikes and synergies offset higher energy costs.
VMO2 CEO Lutz Schüler acknowledged the impact of higher costs, increased usage, and ongoing investments, but expressed confidence in the company’s ability to meet customer needs with its network investments and service improvements. He emphasized the focus on building commercial momentum, realizing joint venture synergies, and future-proofing the networks for the remainder of the year.