NTL announces staff outsourcing programme and 6,000 jobs cuts

Cable TV operator NTL, which recently acquired Virgin Mobile, has announced that it is to cut 6,000 jobs in the UK by 2007 as it trims back and outsources staff.
The company said that the merger with Telewest was likely to realise savings of around £250 million-a-year, as the £3.4 billion merger was completed.
Steve Burch, Chief Executive Officer of NTL, said the first quarter showed "real evidence of operational improvements".
He said: “We are announcing our plans to accelerate our integration program to achieve a run rate of at least £250 million of annualized cost synergies by the end of 2007. Part of this process will involve outsourcing a significant number of jobs, where employment would be transferred to an external organization, as well as actual job reductions. In total, this will involve around 6,000 employees by the end of 2007. Around 80% of the reduction will take place within twelve months. The cost savings from the outsourcing and the job losses combined will be equivalent to around 3,400 full-time equivalent employees.”
NTL, which has a £5 billion debt pile, reported a £4 million profit for the first three months of the year and is looking to further synergies in the market with the recently completed £1 billion acquisition of Virgin Mobile.
The mobile telecommunications deal makes NTL a “quadruple play” company offering cable TV, internet, landline and mobile phones services.
Burch said: “On April 4, 2006, we announced our offer to acquire Virgin Mobile and a license for the Virgin brand allowing us to transform from the UK’s leading triple-play provider into a national entertainment and communications quad-play company, harnessing the power of the Virgin brand and leading our industry in product convergence.
“With the growth opportunities in our markets, together with substantial merger synergies, we believe we can drive significant free cash flow generation going forward, providing us with strong financial flexibility and improved capital deployment options.”
Despite assurances from the company that many of the posts would be shed through "natural attrition" unions described the scale of the NTL cutbacks as "devastating" for the thousands of employees affected across the country.
(SP)