Report: Virgin Media O2 weighs broad cuts to its 16,000-strong workforce
Key Facts
It was not possible to verify an announcement by Virgin Media O2 on November 3 of job cuts or a halt to fiber expansion, while Sky News reported on October 31 that the company was drawing up plans to lay off a significant share of its 16,000 employees. The company is jointly owned by Liberty Global and Telefónica, and did not comment on the layoff plans reported. According to Sky News, most of the cuts are likely to focus on non-customer-facing roles. The report also said the company is reviewing its use of contractors and suppliers in an effort to reduce costs. Based on the published information, the plans remain under consideration and are not an announced company decision.
On the network, Sky News reported that Virgin Media O2 is expected to halt its own construction program to reduce its capital spending budget, attributing the expectation to its sources. The report also said the company is close to an agreement that would allow it to use the Openreach network in parts of the country. The deal would, according to the report, expand its reach from 19 million homes to as many as 25 million, covered by the Openreach network. Broadband TV News reported on November 2, citing the Financial Times, that a potential agreement would allow the company to serve customers outside its existing coverage area. Virgin Media O2 said in its first-quarter results that its fiber footprint had expanded to nearly 9 million premises.
The reports of restructuring come as the company posted weaker quarterly results. Service revenue was £2,042.8 million in the second quarter of 2026, down 3.9% year over year after adjusting for the Daisy treatment, while adjusted earnings before interest, taxes, depreciation and amortization were £975.2 million, down 2.9%. The company also reported a net loss of 28,200 broadband customers in the quarter, with average fixed-line revenue down 4.6% year over year amid competition and promotions. The chief executive of Virgin Media O2's unit said second-quarter performance was in line with full-year guidance and that the company was continuing its transformation across consumer, business and wholesale operations. The company reaffirmed its 2026 guidance for annual declines of between 3% and 5% in service revenue and adjusted earnings, and capital expenditure of between £2.0 billion and £2.2 billion.
Using a potential competitor's network offers a route to expand coverage without relying solely on building a new network, according to details in reports about Openreach and the capital spending program. In the UK market, full fiber was available to 24.9 million premises, or 82% of homes, in January 2026, up by 1.2 million homes over the previous six months, according to Ofcom. In May, the regulator forecast availability would reach 28.1 million homes, or 92% of premises, by the end of 2028 if all submitted expansion plans were carried out. In market developments, Sky News cited a source as saying BT shares rose 6.7% on the Friday before its report, following news that Virgin Media O2 would use the Openreach network. The report gave no final figure for the jobs targeted; it said the expected cost-cutting target would be presented in financial terms rather than as a final number of jobs, and that third-quarter results were scheduled for the week after its publication.
Any cost-cutting plan faces a financial backdrop that includes substantial debt and lease liabilities. Total third-party debt and lease liabilities stood at £22,502.6 million on June 30, 2026, while the ratio of total net debt to annualized adjusted earnings was 5.89 times when supplier financing, leases and certain liabilities excluded from the credit covenant measure were included. The available reports did not disclose confirmed savings from job cuts or a halt to construction. Sky News said the company was expected to confirm its cost-cutting target in financial terms, not as a number of jobs. No company announcement or official details of the plans had appeared in the available information by November 3.