Virgin Media O2 to cut up to a quarter of staff as £22bn debt pile weighs

Virgin Media O2 is swinging the axe. The UK broadband, TV, landline and mobile operator has announced £800m in cost savings, with potentially up to a quarter of its 16,000-strong UK workforce in the firing line. It's also shelving investment in upgrading its cable network to full fibre — a striking retreat for a company that once built its brand on speed.

Mike Fries, chief executive of co-owner Liberty Global, isn't blinking. Asked about the company's future and a possible refinancing of its £22bn debt pile next year, he told analysts: “In our minds, anyway, this is not a crisis.” He added there was nothing to add to “where we sit today.”

The pressure is real, though. Five years ago, Liberty Global and Telefónica sealed a £31bn mega-merger to create a “national champion” capable of taking on BT. Since then, according to Enders Analysis, VMO2 has shed 182,000 broadband customers and 644,000 mobile customers over the past two years — even if total numbers remain above where they stood at the merger.

Blame a brutal market. Roughly 100 so-called alt-nets have been laying fibre, while BT finally decided to “build like fury” and replace its ageing copper lines. That fight has kept prices low and squeezed revenues. One senior industry executive told The Guardian the problems come down to execution: “They once used Usain Bolt in ads to trumpet that they had the fastest speed broadband, now the cables they have in the ground are slower than competitors.”

The own goals haven't helped. In July, Ofcom fined Virgin Media a record £28m after finding millions of customer calls between January 2022 and September 2024 were probably mishandled, including deliberate tactics to stop people cancelling contracts. And last year, its O2 mobile arm sparked a backlash with a surprise monthly bill hike 40% higher than customers had been told — a move boss Lutz Schüler later admitted cost about 110,000 customers and “wasn't the best decision.”

There are brighter spots. VMO2 says Ofcom data shows complaints falling sharply, and it's rolling out a voice AI agent for broadband fault calls. It has invested £11bn in the UK since the merger, expects £200m in free cashflow this year, and has lifted margins from about 34% to just over 40%. A potential deal with BT to use Openreach could stretch its footprint from 19m to up to 25m homes — though filings show £5bn has already gone to shareholders in dividends, money critics say could have fixed the plumbing. Meanwhile, VMO2 is fuming that regulators fast-tracked BT's £400m TalkTalk rescue while the CMA signals it may block Nexfibre's £2bn takeover of Netomnia. As Enders Analysis's Karen Egan put it, there are “a number of audiences” in mind — shareholders, bondholders and those who influence the CMA.