Virgin Media O2 (VMO2) is gearing up to cut thousands of jobs as it looks to tackle its burgeoning £22bn debt pile.
The telecoms giant is reportedly drawing up plans to cut 25pc of its 16,000-strong workforce.
Final details are expected in the company's third quarter results due on Tuesday, with 4,000 job losses expected, Sky News reported.
Most affected jobs are understood to be non-customer facing, with changes in senior management also planned.
Unions including the Communication Workers Union (CWU) and Prospect have been briefed. Job cuts on such a scale would normally involve full consultations with unions and staff.
VMO2 was formed in June 2021 through a £31bn joint-venture merger between Spain's Telefónica and Liberty Global, a Bermuda-domiciled multi-national with head offices in London, to challenge rival BT.
The Financial Times reported in September that VMO2's parent companies were considering cuts in operating expenditure after a sell-off of its bonds during the summer left investors worried about its ability to service its debt pile.
Cuts to its £200m dividend were also on the table, the newspaper said.
The reported plans come just days after Lutz Schüler, the VMO2 chief executive, criticised Lisa Nandy, the Culture Secretary, for backing BT's £400m takeover of rival TalkTalk , which had been at risk of imminent collapse.
In a letter seen by The Telegraph, Mr Schüler wrote: "Protecting customers does not, in our view, require government to predetermine who should ultimately own TalkTalk's consumer and wholesale businesses; credible alternative arrangements should be fully explored.
"Given the exceptional intervention, we would welcome clarity on the evidence relied upon by the secretary of state."
VMO2 has been loaded with debt since its creation when Liberty Global (then the owner of Virgin Media) and Telefónica (then the owner of O2) agreed to merge their UK operations into a 50:50 joint venture.
Virgin Media was carrying roughly £11bn in net debt while O2 UK had virtually none. It meant that to make the combined company exactly 50:50, the joint venture had to borrow billions – meaning it was saddled with about £18bn in debt from day one.
The rise in interest rates subsequent to that deal meant the company has struggled with debt ever since.
In a provisional decision earlier this month, the Competition and Markets Authority said that an attempt by the parent companies of VMO2 to acquire Netomnia for £2bn could push up prices . A final decision on the deal is due in December.
Mike Fries, the chief executive of Liberty Global, warned in March that the company could stop building broadband in the UK if the deal was blocked.
In the 18 months to the end of June, VMO2 shed more than 170,000 customers, leaving 5.42 million remaining.
VMO2 is not the only telecoms giant making job cuts, with BT Group and VodafoneThree also in the midst of significant layoffs.
BT unveiled plans in 2023 to shed as much as a quarter of its then 130,000-strong workforce by 2030, partly driven by AI.
VodafoneThree announced 1,200 job losses across Europe earlier this year as part of a cost-cutting drive to save £700m annually by 2030.
Virgin Media O2 declined to comment. The CWU was contacted for comment.
Noel McClean, the deputy general secretary of Prospect, said: "Reports of expected job losses at VMO2 will be both disappointing and very unsettling for the staff who work there.
"When faced with redundancies, Prospect is committed to supporting our members through what is a difficult time, as well as also working with employers to explore ways to mitigate the number of redundancies and ensure retraining and redeployment of staff affected."
