VMO2 to cut 12% of workforce
July 25, 2023
Virgin Media O2 is to cut up to 2,000 UK jobs, or 12 per cent of its total workforce, by the end of this year. That includes 800 reductions already announced. The news comes as rivals BT and Vodafone both announced major cuts.
Virgin Media O2 said: “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 spokesperson said the firm was supporting its staff as it has “open and honest conversations” about its future.
The company was formed by the 2021 merger of mobile operator O2 and broadband net Virgin Media. The job cuts are due to the continued integration of those two businesses, as well as a wider drive to improve efficiencies, reports the BBC.
Earlier this year, BT, which is the UK’s largest broadband and mobile provider, said it would shed up to 55,000 jobs by the end of the decade, mostly in the UK, as it cuts costs. It said 20 per cent of those posts would be replaced by AI.
“There’s no way of dressing this up,” admits Paolo Pescatore, TMT Analyst at PP Foresight. “It is not good news for UK plc and we can expect to see further cost cutting measures across the industry.”
“Ultimately, it’s about efficiencies,” he suggests. “All telcos are struggling to generate new forms of revenue. Margins continue to be squeezed due to rollout of next generation of networks and people are reluctant to spend more on connectivity.”
“Furthermore, the entity is still going through the integration process of two companies coming together as one. Unfortunately, it feels like job cuts are becoming the norm, akin to annual price rises,” he notes.
“For all providers it’s an opportune moment to focus on efficiencies. This is only part of a successful long term strategy. There should be a greater focus on driving revenues as well,” he recommends.
“We’ve seen a correction in workforce across all sectors, most notably big tech. We are now starting to see this transcend into other verticals. Telco is not immune and with significant technological developments around the corner; this will further fuel job cuts.”
“Should the Vodafone and Three deal get the green light, it is highly likely we will see a reduction in the combined workforce. It is an unfortunate consequence of a merger, joint venture,” he concludes.