Virgin Media O2 (VMO2) said on Tuesday it will cut annual costs by £800 million by 2029 as part of a restructuring that includes thousands of layoffs.
Key takeaways
- Annual savings target: The company aims to save £800 million (£936 million) each year by the end of the plan.
- Phased milestones: About £400 million in savings are expected by 2027 and £600 million by 2028.
- Workforce reduction: The transformation will involve a significant reduction in staff numbers.
- Investment cuts: Plans include trimming spending on new fibre rollout projects.
- Operational changes: VMO2 will restructure its board, limit external service contracts and expand use of artificial‑intelligence tools.
Cost‑saving programme details
VMO2, jointly owned by Telefónica and Liberty Global, outlined a multi‑year programme designed to lower its cost base in a competitive UK telecom market. The firm projects total annual savings of £800 million, equivalent to €936 million, by 2029.
According to the announcement, roughly half of the target (£400 million, €468 million) should be realised by 2027, with the remaining £600 million (€702 million) slated for 2028.
Workforce and investment impact
The plan calls for a substantial reduction in the employee headcount, though exact numbers were not disclosed. In addition, VMO2 will scale back capital expenditure on fibre‑optic network expansion, reflecting a shift in its growth strategy.
Governance and technology shifts
VMO2 intends to revise its senior‑management structure and reduce reliance on third‑party service providers. The company also plans to increase the deployment of artificial‑intelligence solutions to improve efficiency across operations.
Why it matters:
The restructuring underscores the pressure on telecom operators in the United Kingdom to cut costs and adapt to faster‑changing technology landscapes. For consumers and investors in the Middle East and Egypt, the move signals potential shifts in partnership opportunities and market dynamics as major European players streamline operations.