TalkTalk to Cut Hundreds of Jobs in £120m Cost-Saving Overhaul

Broadband provider TalkTalk is set to slash hundreds of jobs as part of a major cost-cutting strategy aimed at saving £120 million and stabilizing its financial position. The company, burdened by significant debt, announced the restructuring plan last week in a bid to address mounting losses and operational inefficiencies.

Initial redundancies are already under consultation, with approximately 130 roles expected to be cut from its Salford-based consumer division. Additional reductions in its wholesale arm, known internally as Platform X, are anticipated to bring total job losses into the hundreds.

The cuts will primarily affect central head office positions, with TalkTalk citing inefficiencies from overlapping business units and management layers. As of February, the company employed 1,857 people, two-thirds of whom were in administrative roles.

The job reductions are part of a broader cost-saving agenda, with TalkTalk aiming to achieve 60% of the targeted £120 million savings within the next 12 months. Beyond layoffs, the company’s plan includes selling non-core businesses, closing offices, and tightening budgets for marketing, travel, and catering.

TalkTalk also intends to leverage automation and artificial intelligence to streamline operations and is exploring outsourcing and offshoring options.

The restructuring comes after TalkTalk narrowly avoided collapse this summer. Founder Sir Charles Dunstone and key shareholders provided a critical cash injection to prevent a default on its £1.2 billion debt. Despite the bailout, the company’s financial struggles persist, with servicing costs on the debt remaining a significant burden.

For the six months ending in August, TalkTalk reported losses of £72 million, while its customer base declined from 3.6 million in February to 3.4 million by August.

Industry analysts remain cautious about TalkTalk’s prospects. James Ratzer of New Street Research noted that even if the cost-cutting measures succeed, generating the anticipated £70 million in free cash flow would fall short of covering the company’s interest obligations.

In an effort to raise funds, TalkTalk last year broke up its business and has since explored the sale of parts of the company. However, negotiations with Australian investor Macquarie over a potential £500 million investment in Platform X ended without a deal earlier this year.

A TalkTalk spokesperson described the restructuring as a “multi-year transformation” designed to simplify operations and maintain competitive connectivity services for millions of customers. They acknowledged the difficulty of the job cuts, stating, “We are consulting on the future of some roles at TalkTalk’s consumer business as part of this transformation.”

This sweeping overhaul marks a critical juncture for the company as it seeks to overcome financial challenges and remain competitive in the U.K.’s broadband market.