Virgin Media O2 to cut thousands of jobs as it plans £800m cost savings

Virgin Media O2 is to cut thousands of jobs in an £800m cost-cutting drive as the telecommunications company aims to tackle its £22bn debt pile.

VMO2, which is jointly owned by Liberty Global and Telefónica, said £300m of the savings target will come from job cuts that will reduce the company’s employee wage bill by 30% over the next two years.

The company did not specify how many jobs this will equate to, but it could be as many as 25% of its 16,000 workforce.

The company, which said that most of the job losses will come from non-customer facing roles, said it intends to increase the use of AI tools in areas including customer service, network planning and fault management.

“While we will give a fuller update on the new strategic plan in the coming months, we are already progressing and making difficult decisions to prioritise investments and reduce costs which includes the size of our workforce,” said the VMO2 chief executive, Lutz Schüler.

“Standing still and doing what we’ve always done is not an option and while many of these decisions are tough, they are necessary for our future success and growth. Virgin Media O2 must evolve, and the action needed to make that happen starts now.”

The cost-cutting plans, which will save £800m annually by 2029, also include making savings by reducing the use of contractors and reviewing suppliers and supply chain contracts.

VMO2 has also moved to reduce capital expenditure by halting investment in upgrading its network to full fibre, which is 50% complete, beyond existing commitments it has with partners.

The company said it is exploring wholesale deals to expand its services in areas its network does not cover, confirming reports that it is close to a deal with BT’s Openreach to extend its footprint from 19m to potentially 25m homes.

“The direction we’re setting today paves the way for the next chapter of Virgin Media O2: a company that will be leaner, clearer on priorities and faster in delivery,” Schuler said.