Cable company NTL revealed its plans today to cut 6,000 jobs from its British workforce following its merger with rival Telewest.
Of the 6,000 job cuts, mostly in back-office operations, roughly half will be outsourced to companies including IBM, chief executive Steve Burch said.
"Those jobs aren't going away, those people will continue to work for NTL, but under the auspices of IBM," he said, adding that none of the outsourced jobs are expected to be located outside the United Kingdom.
The company said it now expects annualised cost savings of at least £250 million by the end of 2007 from the merger.
NTL's revenues for the three months to March 31st rose 22.8 per cent to £611.4 million, mainly due to the Telewest merger. Operating profit was £3.9 million, compared with £13 million a year earlier.
On a net basis, the company posted a loss of £119.9 million, compared with a profit of £455.8 million in the year-ago period, when NTL recorded a one-off gain from an asset sale.
NTL added 25,800 net customers during the quarter. Churn, or the percentage of customers who left the company each month, was 1.3 per cent, down from 1.4 per cent in the previous quarter and level with the year-ago period.
The percentage of "triple-play" customers who subscribe to TV, broadband and phone services increased to 34.9 per cent, from 26.8 per cent a year ago.
NTL has agreed to purchase Virgin Mobile, adding mobile phone service to its product line as it faces increasing competition from satellite broadcaster BSkyB and telecoms giant BT Group.
The company plans eventually to take on the well-known Virgin brand name under a separate licensing agreement with billionaire entrepreneur Richard Branson.