NTL confirms plans to cut 6,000 jobs in the UK

confirmed on Tuesday that it plans to cut 6,000 jobs following its merger with rival cable operator as it seeks to reduce costs.

Steve Burch, chief executive, revealed that about half of the jobs would be outsourced and that 80 per cent of the reductions would happen in the next twelve months.

The cable group that operates in the UK but is listed in New York announced the job cuts as it released first-quarter results that showed a pre-tax loss that more than doubled to Ó121.5m ($225m) on revenues that rose Ó127m to Ó611m as a result of the merger. However, the group recorded a small operating profit of Ó3.9m.

ðoday, we are announcing plans to accelerate our integration programme to achieve a run rate of at least Ó250m of annualised cost synergies by the end of 2007,ðÐsaid Mr Burch. ðart of this process will involve outsourcing a significant number of jobs... as well as actual job reductions.ðì/p>

ðhe cost savings from the outsourcing and the job losses combined will be equivalent to around 3,400 full-time equivalent employees,ðÐhe added.

Over the past year NTL and Telewest have been gradually outsourcing technical jobs in order to reduce staff numbers in preparation for the merger.

ðÿnce again British workers have first heard about job cuts through the media,ðÐsaid Sharon Elliott from Bectu, the media union. ðhe companyð# apparent decision to outsource its call centre operations sends a strong message to staff and customers that quality customer service is dispensable.ðì/p>

ðhe job cuts are typical of a business that is struggling to integrate acquired assets quickly,ðÐsaid Paul MacGregor, UK head of project management consultancy PIPC. ðþTL is desperate to take cost out of its recent mergers and slashing the headcount and outsourcing its support is an obvious short term solution. The fear is that an already struggling customer service record ðÐNTL is one of three ISPs criticised by a YouGov survey for poor service - could deteriorate further and push more customers away.ðì/p>

In April, NTL announced plans to acquire Virgin Mobile as it plans to offer customers a ð!uadruple playðÐof services - fixed line and mobile telephony, internet and television. Such additional services are likely to help reduce customer ðhurnðÐamid intensifying competition in the broadband market and the gradual decline in fixed line telephone usage.

As part of the acquisition of Virgin, NTL signed a 30-year agreement to use the Virgin brand. Mr Burch said on Tuesday that the group would re-brand as Virgin early next year.

http://news.ft.com/