O2 to Cut £800 Million in Costs, Targeting 30% Reduction in Labour Expenses
Overhaul focuses on head office, IT, and support functions amid revenue decline and regulatory fines.
Callum Smith
O2 plans to cut costs by around £800 million annually by 2029.
Lutz Schuler, the company's chief executive, confirmed the difficult decisions. "This is not something I take lightly but my commitment to our people is that for those leaving we will treat them fairly and with respect," Schuler stated.
He added that "standing still and doing what we’ve always done is not an option" given current market conditions, regulatory backdrops, and technological changes. The company has already begun reducing senior leadership positions.
Standing still and doing what we’ve always done is not an option.
Most job cuts will affect non-customer-facing roles. Schuler confirmed, "While we will give a fuller update on the new strategic plan in the coming months, we are already progressing and making difficult decisions to prioritise investments and reduce costs which includes the size of our workforce."
These measures come as the company faces increasing financial pressures. Revenue fell by 5.7 percent in the three months to September 30, with adjusted earnings slipping 2.6 percent to £995.2 million.
Separately, Ofcom fined Virgin Media O2 £28 million in July. The fine addressed issues where the company prevented or delayed contract cancellations between January 2022 and September 2024.
The firm plans to cut roles as it works to tackle its £22 billion debt pile. With a UK workforce of 16,000 employees, the company also considers a relaunch of Virgin Mobile as part of its strategic re-evaluation.