The UK’s telecommunications sector received a substantial blow today, with Virgin Media O2 (VMO2) announcing a significant staff reduction plan following the publication of its Q2 results. The telecom giant confirmed its intent to eliminate about 11% of its total workforce by 2023’s close. This announcement substantiates earlier speculations about potential job cuts, amounting to approximately 2,000 positions.
VMO2’s drastic move emerges just over two years post its formation via a £31 billion merger, a transaction leaving the company grappling with more than £20 billion in debt. According to a company spokesperson, “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”.
On an interesting note, the company’s quarterly report corroborated the diminution of 24,700 fixed line customers and a slide in 1,500 mobile subscribers. Experts believe that customer attrition is likely the consequence of a price hike implemented in April, compounded by the ongoing economic strains on consumer costs of living.
Despite the loss in customer base, the increased prices contributed to a 6.2% year-on-year revenue growth, elevating the total income to £2.71 billion. VMO2’s CEO Lutz Schüler commented, “As we navigate a tough economic climate, we have a clear long-term strategy and continue to deliver for customers”, he further highlighted that amidst the skyrocketing costs, usage surges and continuous investment, the necessary price increases have been imposing the expected impact on VMO2’s Q2 revenue and EBITDA growth.
The trend of workforce downsize is in line with VMO2’s major competitors, as BT publicly announced a plan to cut 55,000 jobs before 2030. Outgoing CEO Phillip Jansen anticipates AI to replace approximately 10,000 of these roles. Moreover, Vodafone also plunged into the layoff movement by announcing its strategy to cut 11,000 jobs over the next three years to rebound from its recent disappointing financial performance.
Insights from industry insiders like Paolo Pescatore of PP Foresight shed light on the current trend of job cuts in the telecommunications industry. He elaborated, “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…” pointing to imminent technological advances as a key driver for future job cuts.
Vigorous discussions and debates on the impact of these recent job reductions on the UK’s telecoms industry are accumulating traction within this sector’s ecosystem. Reflective debates like these underpin the thematic discussions at this year’s live Connected Britain conference. Meanwhile, further news emerges with new leadership strategies influencing the telecom landscape, such as Della Valle’s dual-edged sword approach to downsizing at Vodafone while achieving a sales increase amidst looming merger scenarios. The repercussions of these job cuts, such as BT’s potential shift away from its stronghold at the iconic Adastral Park, represent a comprehensive reshuffling of talent across the UK telecoms industry.
