UK Cable Firms Merger Could Cost 6,000 Jobs

09 May 2006

UK cable provider NTL is set to announce up to 6,000 job cuts later today (Tuesday), together with its first quarter results.

The US-headquartered company, which only operates in the UK, will shed around one third of its work-force in the aftermath of its merger with nominal rival Telewest [WAMN: 04-Oct-05], also US-owned but UK operated.

The £3.7bn ($6.89bn; €5.4bn) union is being completed in tandem with a £960 million acquisition of Sir Richard Branson's Virgin Mobile cellphone business.

The enlarged NTL will be Britain's biggest cable operator and will offer its customers the quadruple play of fixed line and mobile telephony, internet and television.

But ceo Stephen Burch must squeeze out around £250m in cost savings. He was brought into NTL in January because of his expertise at taking costs out of merged cable companies. He previously headed US cable giant Comcast.

Analysts believe the full integration of NTL and Telewest could take up to 18 months and estimate that the restructuring will cost £30m in the current financial year. The first savings from the acquisition are expected to feed through to the bottom line next year.

Data sourced from Financial Times Online; additional content by WARC staff