Job risk sours NTL/Telewest tie-up
'Rationalisation is likely'
NTL and Telewest have confirmed that they are to merge. But while the companies are "bigging up" the deal as creating a "new competitive force in the UK's communications and entertainment sectors", there are fears that thousands of jobs will be lost as part of the tie-up.
Bloomberg quotes financial outfit UBS as saying that as many as one in four of the 19,000 or so people employed by both companies could lose their jobs once the deal is completed next year.
Indeed, Telewest's acting chief exec Barry Elson and COO Eric Tveter are already set to leave once the deal is finalised.
While in today's announcement both companies noted that the deal would generate around £1.5bn in "synergies" which would be "realised through optimising networks, systems and applications, implementing best practices and eliminating duplicated activities".
It is the "elimination of duplicated activities" that is likely to cause concern within both companies' workforces.
Asked to elaborate, a spokesman for NTL declined to comment on future employment plans for the company.
However, a spokeswoman for Telewest was more up-front: "While rationalisation is likely it is really too early to get into the specifics as it's early days.
"The best people will be needed for the new company - the integration process will be rigorous and there will be opportunities for employees from both sides."
NTL's decision to acquire the UK's second largest cableco values Telewest at around $6bn and follows a flurry of reports at the weekend trailing the deal.
The pair - whose cable networks do not overlap - will be able to provide TV, phone and broadband to more than half of UK homes.
Once merged, the combined group will have almost five million residential punters and is set to be the largest provider of domestic broadband services in the UK with 2.5m subscribers.
It will also be the second largest pay TV outfit with 3.3m punters and the number two fixed telephony provider with 4.3m subscribers.
The enlarged group will also generate revenues of around £3.4bn and operating income of £1.2bn.
Said NTL chief exec Simon Duffy, who will also head the new organisation: "This is a transforming transaction for the UK cable industry. It marks not just the culmination of a decade of consolidation but, more importantly, the creation of a new competitive force in the communications and entertainment sectors in the UK." ®