NTL cuts 35 per cent of staff, talks up future

NTL has today confirmed that 6,000 jobs will be cut from its 17,000-strong payroll as the cable company seeks to find £250m of cost savings before the end of 2007.

Some 1,535 employees will be taken on by IBM, which NTL already has an outsourcing deal with, while a "significant number" will be taken on by other organisations which the company declined to name.

NTL said it believes the loss of a large number of staff whose roles won't be outsourced will be accounted for by natural attrition, voluntary redundancy and a reduction in the use of temporary staff.

While NTL didn't provide details of which job functions will be affected, call centre workers are among those expected to be hardest hit. The decision to cut support staff may prove controversial in light of recent research into ISP customer satisfaction, which showed NTL to be providing the least satisfactory levels of customer service and Telewest the most.

NTL merged with Telewest last year and then this year announced the purchase of Virgin Mobile, to add mobile services to its TV, phone and broadband offerings.

NTL CEO Steve Burch said in a conference call that the integration with Virgin Mobile "effectively will be completed... by the end of 2007".

Neil Berkett, COO at NTL, said in a statement: "Since we announced the merger with Telewest, we have consistently said that headcount reductions are likely. We cannot avoid taking difficult decisions if it means a better experience for our customers in the long term. We recognise that today's announcement will mean uncertainty for some employees and the communities they live in."

This is the second round of large-scale layoffs for NTL, which reduced its workforce from 21,000 to 13,000 in 2001 in an effort to cut its then £14bn debt. Today's round of redundancies is a result of NTL's $6bn acquisition of rival Telewest and the merged company's aim to achieve "cost synergies" post-union.

The job losses follow in the wake of massive redundancies across the telecoms sector. Orange announced 2,000 job cuts in the UK last week, while an ongoing programme to reduce staff numbers at telco Cable & Wireless will see 3,000 staff lose their jobs.

NTL's redundancies come as the company revealed its first quarter results for 2006. The company reported revenue of £611m, up £127m on the previous quarter. NTL described the rise as "mainly due to the merger with Telewest".

However, the merger has also hit NTL's bottom line. The cable company reported costs of £16.3m in merger and related fees, such as investment banking fees and insurance costs; £4.6m from Telewest long-term incentive plan costs; and £3.6m of consultancy fees relating to the merger integration.

Tony Hallett contributed to this report