THE CRUNCH

Virgin Media O2 has outlined plans to cut roughly 30 percent of its people costs over the next two years, with thousands of roles expected to go. The redundancies are one of a number of cost reduction measures in a wider transformation programme the UK's second largest telecoms provider says will save around £800 million by 2029. VMO2, which employs 16,000 people, said most cuts will come from non-customer facing roles, but declined to give a specific headcount while plans are finalised and staff consultations take place.

The company is also pulling another cost lever: it will stop investing in further fibre network upgrades beyond existing commitments. Instead, a cheaper upgrade to its hybrid fibre-coaxial cable network is planned, intended to bring 2 Gbps services to most of that network in 2027.

The cuts come against a difficult financial backdrop. Revenue has fallen over several successive quarters, with Q3 2026 revenue down 5.7 percent year-on-year to £2.43 billion, and VMO2 forecasts a decline of 3 to 5 percent for the whole of 2026. That is a sharp contrast with the £10 billion the merged company pledged in 2021 to spend on 5G coverage and gigabit full-fibre networks, commitments it cited when justifying the merger.

Analysts saw the moves coming but questioned the consequences. Tom Oughton of Megabuyte noted the savings target sits ahead of VMO2's first debt expiry in 2029, and warned that cutting headcount by 25 percent or more at a business declining organically "could stretch operations, worsen customer support, and cause broader disruption." PP Foresight's Paolo Pescatore was blunter, saying the company "is in serious trouble" and that cost cuts "can buy time, but it cannot repair those relationships or compensate for weak execution."

The Prospect union's deputy general secretary Noel McClean said the job cuts "will be devastating for those directly affected" and would drastically alter how VMO2 works.

Key dates

VMO2 upcoming steps

  1. 2027

    2 Gbps services to most of the cable network

  2. 2029

    £800 million of savings targeted

Dates from The Register, as quoted in this brief.