UK telecoms giant Virgin Media O2 is preparing to axe thousands of jobs as it works to slash its £22 billion ($29.55bn) debt pile.

As reported by Sky News over the weekend, the telco is looking into plans to cut a significant proportion of its 16,000-strong workforce in the coming months.

The timing of the report comes shortly after the Financial Times reported that Virgin Media O2 was nearing a deal to use rival BT's Openreach broadband network in areas not covered by its existing network, as the company looks to scale back on planned upgrades and the expansion of its own infrastructure.

Virgin Media O2 declined to comment on those reports, and has been contacted by DCD for comment on the latest reports about the proposed redundancies. The company's parent companies are Liberty Global and Telefónica.

Sky News reports that numbers are still being finalized ahead of the company's third quarter results, set to be announced tomorrow (November 3), when a cost-reduction target will be confirmed, though sources suggested as many as 4,000 jobs were likely to be affected.

Trade union officials at the CWU and Prospect have reportedly been briefed on the plans.

Talks of cost-cutting measures have been mooted around the telco, with a previous FT report suggesting that VMO2's owners are looking to drive cost cuts of £600 million ($805m), amid investor concerns that the telco is struggling to service its debt.

Virgin Media was set to receive a cash injection of £1.1bn ($1.48bn) in return for transferring 4.6 million homes onto a network owned by Nexfibre, another UK broadband provider owned by Virgin Media's shareholders.

At present, Virgin Media and Nexfibre’s combined UK broadband network reaches around 19 million UK premises, of which nine million are served by their full fiber.

As part of that deal, Infravia, Liberty Global, and Telefónica pledged to commit £1bn ($1.35bn) in new net funding for Nexfibre to fund the transaction. This is made up of £850m ($1.1bn) from Infravia and £150m ($201m) jointly from Liberty Global and Telefónica.

However, the Competition and Markets Authority (CMA) said it could block Nexfibre's planned £2bn ($2.69bn) takeover of Netomnia, representing a significant blow for Virgin Media's full fiber goals.

The telco has previously shed jobs in the years after its merger was completed, with around 2,000 jobs cut in 2023, while earlier this year it was reported that up to 300 jobs in the UK were being lost.

Virgin Media O2 is far from the only UK telecoms company to cut jobs or consider further cuts. The company's biggest rival and the UK's largest telco, BT, is working towards its goal to cut 55,000 jobs by the end of the decade.

Another competitor in the broadband arena, Sky, previously cut hundreds of jobs last year, while TalkTalk, set to be snapped up by BT, has also cut jobs in recent years.