Virgin Media O2 set to cut thousands of jobs to reduce costs

Thousands of Virgin Media O2 staff are facing redundancy as the telecoms firm attempts to save money in the face of billions of pounds of debt and tougher competition.

The broadband provider has not finalised the number of roles to be cut but it is likely be a sizeable chunk of its 16,000-strong workforce, the BBC understands.

Virgin Media O2 has billions in debt on its balance sheet and is tackling both smaller providers as well as giants like BT, which has agreed a deal to acquire rival TalkTalk, which Virgin Media O2 has firmly opposed.

The company declined to comment. Prospect, a union which represents Virgin Media O2 staff, said the cuts were "disappointing and very unsettling".

Noel McClean. deputy general secretary at Prospect, said the union was "committed to supporting our members through what is a difficult time, as well as also working with employers to explore ways to mitigate the number of redundancies and ensure retraining and redeployment of staff affected".

The majority of the affected staff are in roles that are not customer-facing and a number of senior leadership changes are already under way, the BBC has been told.

Virgin Media O2 is also expected to review its use of contractors and suppliers in conjunction with the job cuts.

As of 30 June, Virgin Media O2's total liabilities stands at £27.2bn while it holds assets worth £45.9bn, according to the firm's latest accounts.

Meanwhile, the company is dealing with fierce competition from cheaper "altnets" like Hyperoptic, Community Fibre, Gigaclear and YouFibre.

Virgin Media O2 had attempted to respond to this growing threat by buying altnet competitor Netomnia for £2bn via nexfibre, a joint venture owned by Virgin Media O2's owners.

However, the Competition Markets Authority (CMA) has provisionally found competition concerns in the deal, with a final decision to come in December, sparking anger from Virgin Media O2.

In October, Virgin Media O2 called the BT's agreed takeover of TalkTalk a "stitch-up" that had allowed its rival to "tighten its grip" over the market.

BT said its deal provided "a safety net" for TalkTalk customers as their broadband provider faced collapse without the takeover.

On Friday, BT's share price jumped 7% after the Financial Times reported Virgin Media O2 was close to agreeing a deal to use its rival's fibre broadband network.

The BBC has been told the deal was very close and that Virgin Media O2 was highly likely to announce it will stop all investment in fibre in its results on Tuesday.

Additional reporting by Ben King