NTL to shed a third of staff as Burch cuts costs

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The cable giant NTL is expected to announce 6,000 job losses as part of its merger with rival Telewest. The cull, which will see around a third of the combined group's workforce lose their jobs, will be formally announced by NTL's chief executive Stephen Burch at the company's first quarter results tomorrow.

The group, which has all its operations in the UK but is listed in New York, presently employs around 18,000 people. Staff can expect a mixture of redundancies and a programme of outsourcing jobs abroad as Mr Burch tries to squeeze £250m of cost savings from last October's merger.

He is believed to be in talks to expand an agreement with IBM and Fujitsu that could see a large number of jobs moved to call centres in South Africa and India. The closure of several of NTL's eight call centres along with Telewest's head office in Woking is thought to be inevitable.

The cable giant, which services more than 5 million households in the UK, recently finalised the terms of its £1bn purchase of Virgin Mobile. At this stage, Virgin will remain unaffected by the restructuring but analysts believe that it will also suffer job losses once its acquisition has been bedded down. The deal means that NTL can offer customers the "quad play" of mobile phone, broadband, fixed line telephone and cable television.

News of the cost savings will be welcomed by NTL shareholders. The cable group paid £3.4bn for Telewest and now has a £5.5bn debt mountain to service. However, it is another blow for the telecoms industry, which is still reeling from last week's decision by Orange to axe 2,000 UK jobs. Meanwhile, Cable & Wireless is aiming to slash 3,000 jobs over the next five years in an attempt to counter falling profit margins in the industry.

Steven Burch was brought in at NTL in January because of his expertise at taking costs out of merged cable companies. Previously he was chief executive at US cable operator Comcast. Analysts believe that the full integration of NTL and Telewest could take up to 18 months. They estimate 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.

NTL declined to comment on the job losses. Last week it missed out on securing rights to Premier League football matches when BskyB retained the bulk of the rights for £1.3bn and Setanta, the Irish pay-TV operator, paid £392m for the remainder.

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