For the first quarter ending March 31, the Hook, UK-based UK cable giant reported a net loss of 119.9m pounds ($223m), compared to a profit of 455.8m pounds ($849m) in the year-ago quarter. NTL blamed the loss primarily on the increased interest expenses from debt incurred with its 3.4bn pound ($5.8bn) purchase of fellow UK cable operator Telewest Global Inc.
Sales meanwhile grew to 611.4m pounds ($1.14bn) from 497.8m pounds ($927m), again mostly thanks the Telewest acquisition. NTL added 25,800 new customers in the first quarter, compared to 40,700 in the previous quarter and 55,700 in the same quarter last year. Churn levels fell to 1.3% from 1.4% in the previous period.
However, NTL confirmed that 6,000 positions would be lost from the 17,000 strong NTL/Telewest UK workforce by the end of 2007, as part of its post-merger restructuring process. According to CEO Steven Burch, 3,000 positions will be outsourced to IBM Corp, while the remaining 3,000 will simply be eliminated, mostly via natural attrition, voluntary severance, and cuts in temporary staff. Burch said that about 80% of the reductions would take place within 12 months, and that the cost savings from the outsourcing and the job losses combined will be equivalent to around 3,400 full-time equivalent employees. The axe is expected to fall predominantly in the back-office operations, with an initial 1,535 positions being transferred to IBM by July.
Brian Healy, The Communication Workers Union assistant secretary said: We are pleased to see that in response to our lobbying NTL/Telewest has decided to keep the first wave of 1,500 outsourced customer contact center operations within the UK, and not to offshore these jobs. We are now awaiting a formal response from the company finalizing locations that will be affected and the details of transfer agreements.
NTL is hoping the cuts will allow it to deliver its promised annualized cost synergies of 250m pounds ($466m) from the merger with Telewest from the end of 2007.
