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Virgin Media O2, a British telecommunications group, announced Tuesday that it will cut thousands of jobs under a broad cost-cutting program, aided by increased use of artificial intelligence (AI), to reduce its debt pile.
The telecoms group said it expected to save around £300 million ($400 million) in staff expenses, as part of a broader plan to slash costs by around £800 million a year by 2029.
The group, which employs 16,000 people, did not confirm how many jobs would be axed but said the number would be in the thousands.
“While many of these decisions are tough, they are necessary for our future success and growth,” chief executive Lutz Schuler said in a statement.
“Given the market conditions we face, the regulatory backdrop in fiber, the high-speed broadband delivered through fiber-optic cables, and the technological changes sweeping across all areas of the economy, standing still and doing what we’ve always done is not an option,” he said.
Most job losses over the next two years will come from head office restructuring, including cuts to senior leadership roles, rather than positions that involve direct dealings with customers.
“The company also expects a greater use of AI tools and digital channels to drive efficiency, productivity and better customer experience,” the group said, adding that it has launched a voice AI agent to handle broadband fault calls.
The group said it would give further updates on the restructuring plan with its annual earnings release in February.
Virgin Media O2 announced job cuts as it faces investor pressure to reduce debt of more than £22 billion ($29 billion). The announcement came with third-quarter results showing revenue down 5.7% year on year to £2.4 billion.
While it returned to a net profit of £1.5 million in the July-September period, it also lost more than 23,000 customers across its internet and phone services.
To cut costs, the group is halting the roll-out of its fiber network upgrades beyond existing commitments.
It is also reviewing its use of contractors and suppliers. “The result of these changes will be a leaner business that has fewer layers, greater focus, optimized investment and faster decision-making,” the group said.
It cited “a tough macroeconomic climate” and “an intensely competitive and shrinking broadband market” as reasons for the job cuts.
Spanish operator Telefonica and U.S. group Liberty Global merged their U.K. units O2 and Virgin Media in 2021. The group had already cut 2,000 jobs in 2023 following wider culls across the British telecoms sector.
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