NTL to shed 4,000 UK jobs ahead of Virgin takeover

Integration following Telewest link-up prompts head-office redundancies and big switch to overseas call centres
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The Independent Online

NTL, which recently completed the acquisition of cable rival Telewest, will announce this week that 4,000 UK jobs are to be axed. The company will give an update on its plans to integrate the two businesses when it announces first-quarter results on Tuesday.

NTL will say that Telewest's Woking head office will be closed and some of the staff moved to NTL's existing head office, in Hook, Hampshire.

It is also understood that most of the combined group's call centres will be outsourced, with some of the jobs going to offshore centres in India.

NTL, which like former rival Telewest grew by acquiring regional cable companies, has recently cut its 13 call centres in the UK to seven. It already has two outsourcing deals with IBM and Fujitsu.

More outsourcing deals are expected to follow shortly as part of the restructuring to be announced this week.

In addition to the job losses in call centres and head offices, cuts in marketing operations are predicted.

The two companies employ a combined workforce of just over 17,000 in the UK. The reductions to be unveiled this week mean that almost one in four employees will lose their posts. Last week, Orange, the mobile phone group, announced 2,000 job losses.

It is expected that the full integration of NTL and Telewest will take up to 18 months, so some of the losses will not be immediate. Voluntary redundancies and vacant positions not being filled will make up some of the cuts. But it is expected that many will have to come through compulsory redundancies.

NTL has indicated that merging the two businesses will save £250m over the next three years.

Analysts at investment bank UBS reckon that the restructuring will cost £30m in the current financial year, with the first savings from the acquisition starting to feed through to the bottom line next year.

The long-awaited takeover was completed in March. NTL has also reshuffled its board, with Stephen Burch becoming president and chief executive in January, joining from US cable company Comcast.

More upheaval will follow with the more recent acquisition by NTL of Virgin Mobile. The £962m deal, the terms of which were finally confirmed last month, will enable NTL to offer customers the "quad play" of mobile phone, broadband, fixed-line telephone and cable television. Fewer jobs are expected to be cut when Virgin Mobile is integrated.