By Karim Hammam
Virgin Media O2 has confirmed plans to axe thousands of UK jobs as part of a drive to slash annual costs by around £800 million by 2029. The telecoms giant, jointly owned by Liberty Global and Telefónica, said the bulk of the savings – about £300 million – will come from reductions across its 16,000-strong UK workforce, aiming to cut staff costs by roughly 30%.
Cost Savings and Job Cuts
The company did not specify the exact number of roles to be lost but said most affected positions would not be customer-facing. The overhaul is expected to focus on head office, IT and support functions, with a review of contractors and suppliers also planned. Half of the annual savings – £400 million – are targeted for the next financial year, with most affected workers to be notified by February. The restructuring will incur about £250 million in one-off costs.
Strategic Shift and AI Investment
Virgin Media O2 also announced it will halt further fibre network building and instead concentrate on upgrading its existing network to 2Gbps speeds, describing this as a lower-cost option. The group said it would ramp up the use of artificial intelligence to support faster decision-making and delivery. Chief executive Lutz Schuler said the moves were necessary given market conditions, regulatory pressures in fibre, and technological changes across the economy.
Financial Pressures and Competition
The company is grappling with a debt pile exceeding £22 billion and intense competition from cheaper alternative broadband providers as well as BT, which recently expanded its market share through the emergency takeover of TalkTalk. Virgin Media O2's owners are also facing scrutiny from the Competition and Markets Authority over a planned £2 billion acquisition of alt-net Netomnia by their joint venture Nexfibre.
Quarterly Results Show Decline
Third-quarter results released on Tuesday showed service revenues fell 3.5% in the three months to September 30, with a net loss of 23,300 fixed-line customers. Consumer fixed annual revenue per user dropped 5% to £45.83, while underlying earnings fell 2.6% as a 5.4% reduction in costs failed to offset the revenue decline.
