As many as a third of Virgin Media’s 120 executive directors and directors could lose their jobs as the UK cable group eliminates areas of duplication with Liberty in divisions such as finance, HR and legal.
Virgin Media said that the decision would “not impact our absolute focus on our customers, where we’ve invested in creating a thousand extra customer service roles this year”.
“We’re building an agile and efficient organisation that’s fit for growth and can make the most of being part of the biggest cable company in the world,” the company said.
The company’s front-line staff, which includes engineers and call-centre workers and who account for the bulk of its 15,000 employees, are understood to be unaffected by the job losses. Consultations about the redundancies began yesterday morning.
The planned cost-savings come amid intensifying competition in the pay TV and broadband markets following August’s launch of three sports TV channels by BT, offered free to its broadband customers.
The shift into TV by the UK telecoms operator is part of its broader strategy to capture a larger share of the lucrative high speed broadband market following successful inroads by both Virgin Media and BSkyB, the UK satellite operator.
In response to BT’s launch, BSkyB has cut its high-speed broadband tariffs with a series of price cuts giving subscribers to its Sky Sports channels its basic broadband product free for the first year and its high-speed broadband free for the first six months.
Liberty Global, the international cable operations of John Malone, has said it will continue with Virgin Media’s strategy of investing in faster broadband networks and steer clear from owning premium content that could put it in a bidding war against BSkyB for prized content.
Tom Mockridge, a former chief executive of Rupert Murdoch’s UK newspaper News International, who in May joined as Virgin Media’s chief executive, said: “Like organisations across the public and private sector, Virgin Media is making sure it has the structure it needs to meet the needs of its customers. These proposals are designed to take advantage of the opportunities that come with being part of the world’s largest cable operator and create an organisation that’s fit for growth.”