Thousands of jobs are to be cut at Virgin Media O2 as the company seeks to cut spending by £800 million per year.
Formed through the merger of Liberty Global and Telefónica’s UK assets, the company is one of the nation’s biggest providers of mobile, broadband and pay TV services.
However the Virgin Media side of the business has a reputation for bad customer service and earlier this year was fined £28m by sector regulator Ofcom for its handling of customers who wanted to cancel their services.
Today the company has unveiled changes which it says will lead to “greater customer satisfaction, sustainable growth and increased operational cash generation.”
These include appointing a new lead for each of its consumer brands, simplifying its product line-up plus “addressing core customer pain points; and better rewarding loyalty to maintain value and reduce churn.”
It’s also halting all further fibre upgrades beyond its existing commitments and will instead rely on upgrades to its existing HFC network to “continue to deliver market-leading broadband at scale”.
VM02 also confirmed that it’s considering entering into wholesale arrangements to offer broadband services outside of areas not covered by its own network.
Beyond its consumer operations, the business will seek to “cut complexity” in its B2B product portfolio and to look to sustain its position as “the leading network of choice” for virtual mobile operators.
Lutz Schüler, CEO of Virgin Media O2 said: “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, with brilliant brands and an unwavering focus to get back to what really makes a difference to our customers.
“Given the market conditions we face, the regulatory backdrop in fibre and the technological changes sweeping across all areas of the economy, 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.
“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.
“This is not something I take lightly but my commitment to our people is that for those leaving we will treat them fairly and with respect, and for those staying we will work differently, but as one team, to get back to winning again. Virgin Media O2 must evolve, and the action needed to make that happen starts now.”