VMO2 prepara miles de despidos para ahorrar costes

Virgin Media O2 (VMO2), a British telecom subsidiary of Telefónica and Liberty Media, is set to lay off thousands of employees as part of a cost-cutting program amid investor and creditor concerns over its £22 billion debt, according to Sky News. The exact number of layoffs is still undetermined, but sources close to VMO2 say up to 4,000 positions, or about 25% of the workforce of 16,000, may be affected.

The company is expected to confirm a financial cost-reduction target at its third-quarter results presentation next Tuesday. Most of the affected staff will not have direct customer contact, and several changes have already been made at the executive level, with CEO Lutz Schuler leading the company. VMO2 is also expected to review its use of contractors and suppliers to further reduce costs.

The telecom giant is considering several measures to cut expenses, including halting the rollout of new fiber-to-the-home (FTTH) networks and discontinuing the modernization of its hybrid fiber-coaxial (HFC) network to a fully FTTH infrastructure. These decisions come amid growing investor concern over VMO2's heavy debt burden, which has caused its bond prices to plummet during the past summer.

The company has taken three steps to save costs: stopping new FTTH deployments, halting the upgrade of its HFC network to a fully FTTH network, and potentially reducing dividends and capital expenditures by £600 million. The FT's July reporting suggested VMO2 was considering other debt reduction options, including dividend cuts and capital expenditure reductions.

The recent acquisition of TalkTalk by BT has further angered VMO2, which fears that the dominant incumbent's Openreach division could consolidate its market power. The Competition and Markets Authority (CMA) and Ofcom, the communications regulator, have shown a protective stance towards established national players, with the CMA opposing Netomnia's acquisition by Nextfibre and favoring BT's acquisition of TalkTalk.

This stance, along with the possibility of losing a £1.2 billion financial injection without Nextfibre's involvement, has added to VMO2's financial woes and prompted the company to accelerate its cost-cutting plan.