Debt-beset British cable operator Telewest – whose major shareholders include US firms Microsoft and Liberty Media – is to axe 1,500 staff in a bid to cut annual costs by £50 million ($73.2m; €81.1m).
The redundancies, which mostly will affect Telewest’s networks division and leave the group with a workforce of 9,000, accompany a planned reduction in capital expenditure from the previously expected £500m–£550m to below £500m.
News of the layoffs came as Telewest posted Q1 results that matched analysts’ expectations. Pre-tax losses narrowed from £208m a year ago to £167m; revenues rose from £321m to £334m; and EBITDA (earnings before interest, tax, depreciation and amortization) jumped 34% to £91m.
Despite widespread concern among investors about the company’s debt burden, it is not yet in danger of running into a funding crisis, having enough cash to last at least fifteen months. However, speculation persists that it will have to reduce debt, probably by following the lead of its larger rival NTL and organising a debt-for-equity swap.
Data sourced from: Financial Times; additional content by WARC staff