Virgin Media O2 plans to reduce its workforce and narrow its full-fiber upgrade program after losing fixed-line customers, moves intended to strengthen its finances amid competition.
The British telecom operator said Nov. 3 that it is targeting about £800 million in gross annualized run-rate savings by 2029, measured against 2026 costs. The target covers operating expenses, capital spending and certain other costs, but excludes restructuring and program costs.
Workforce changes are expected to provide about £300 million of the target. Virgin Media O2 says the proposals would reduce people costs by roughly 30% over two years, mainly in roles without direct customer contact. The changes are subject to consultation, and the company has given no job-cut figure.
Virgin Media O2 will stop converting its cable network to full fiber beyond existing commitments to partners. It is deploying a lower-cost upgrade intended to bring 2-gigabit-per-second service to most of its hybrid fiber-coaxial network in 2027. The company is also considering wholesale access in areas covered by neither its network nor nexfibre’s, but has named no potential provider.
In the three months ended Sept. 30, 2026, Virgin Media O2 lost 23,300 consumer fixed-line customer relationships. Revenue fell 5.7% to £2,426.7 million on a comparison adjusted for the Daisy transaction. Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization, declined 2.6% to £995.2 million on the same basis. Third-party debt and lease obligations totaled £22,418.1 million at quarter-end.
The company, jointly owned by Liberty Global and Telefónica, cited intense competition, a shrinking broadband market and what it considers an unfavorable regulatory direction for fiber investment. It is targeting about £400 million in annualized savings in 2027 and £600 million in 2028. It expects to set out its full strategy around its full-year results and update its review of planned 2026 shareholder distributions in the first quarter of 2027, when those results are announced and the Netomnia transaction’s outcome is known.
Separately, the Competition and Markets Authority (CMA) has provisionally raised concerns about wholesale broadband competition in nexfibre’s proposed acquisition of Substantial, which includes Netomnia. The CMA’s merger inquiry lists Dec. 15 as its statutory deadline.
