Virgin Media O2 (VMO2) has announced it will cut as many as 2,000 jobs this year - a move that one expert said could be the start of much wider cost-cutting measures being taken across the telecoms industry.
The telco giant, which reported a boost in revenue in its Q2 2024 results, will fire as much as 12% of its workforce by the end of the year.
VMO2 said that the cuts include some 800 redundancies that had already been reported. It also pointed to the relative stability of its workforce since the Virgin Media O2 merger went ahead in 2021.
The organization also refuted claims that employees would be made redundant as soon as Monday, as reported by The Telegraph, and said it is in open dialogue with unions.
“There’s no way of dressing this up,” said Paolo Pescatore, founder and TMT analyst at PP Foresight, to ITPro.
“It is not good news for UK plc and we can expect to see further cost-cutting measures across the industry.”
Pescatore said next-generation networks like 5G continue to push up network operator costs, and that better revenue opportunities should be identified alongside efficiency measures.
The pattern of job cuts could become routine within the industry, he indicated, likening the move to the annual price rises that businesses and consumers have come to expect.
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“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,” said a VMO2 spokesperson.
“While we know any period of change can be difficult, we are committed to supporting all of our people and are working closely with the CWU and Prospect along with our internal employee representatives as we have open and honest conversations on the future direction of our business.”
VMO2 reported [PDF] a 6.2% year-on-year rise in transaction-adjusted revenue in its Q2 results, even as B2B fixed revenue fell by 7.8% across the same period.
This was offset by clear growth of 4.7% in its mobile revenue, which totaled £1.5 billion ($1.93 billion) to June 30 and was driven by consumer price rises.
News of the layoffs comes amid other large changes in the UK telco landscape.
Vodafone and Three are set to merge in a move that could significantly increase investment in the sector over the next decade and could drive down costs for end-users.
Pescatore also said that the proposed Vodafone and Three merger was very likely to result in more mass layoffs.
In May, Vodafone announced its largest-ever round of redundancies, with 11,000 people across its workforce to lose their roles over the next three years as the firm continues to struggle with financial underperformance.
