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Latest NewsJob creation and lossesUK

Lycamobile to cut 90% of UK workforce

by Kavitha Sivasubramaniam 17 Dec 2024
by Kavitha Sivasubramaniam 17 Dec 2024 Shutterstock / Mick Harper
Shutterstock / Mick Harper

Lycamobile is slashing its UK workforce by 90%, putting more than 300 jobs at risk just days before Christmas.

The telecoms firm told staff at its London headquarters that it faced “pretty serious challenges”, with the redundancies reaching 316 and potentially leaving just 48 employees in the UK.

Its general counsel David Dobbie attributed the cuts to inflation, competition and legacy technology issues, according to The Guardian.

In a staff meeting last week, he said a consultation would soon be underway, although warned the process could take some time to carry out. Nobody would lose their jobs before 31 January 2025, he added.

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Redundancies are likely to affect several operations in the Lyca group, which include media, property and the Bella Cosa restaurant chain.

Some of the UK services which will be axed, including customer service, will be shifted offshore to countries such as India.

“This proposed expansion of global service centres is going to unlock significant cost savings for us,” Dobbie said, reportedly asking for support f employees to “make this no harder than it needs to be”.

Founded by Sri Lankan businessman Subaskaran Allirajah, Lycamobile claims to have more than 16 million customers in 22 countries globally.

The business sells pay-as-you-go sim cards, which are primarily targeted at low-paid workers who want to make low-cost phone calls, both in the UK and overseas.

In 2022, the company lost £24m and it is also engaged in a long-running battle with HMRC over an unpaid VAT bill allegedly amounting to 351m.

A year later, its French business was fined the equivalent of £8.3m for money laundering and VAT fraud.

A Lycamobile spokesperson said: “As with all other UK companies, Lycamobile reviews its business model on an ongoing basis to provide the best possible service to its customers.

“No final decisions have been made on any changes to our model at this time, but we have announced a consultation process regarding strategic changes to align with our long-term growth goals and the challenges facing our business and other telcos, including a focus on digital transformation.”

The spokesperson added that its dealings with HMRC are ongoing and said there are currently no updates on the situation.

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Kavitha Sivasubramaniam

Kavitha Sivasubramaniam is an experienced journalist, editor and communications professional who has been working in B2B publishing for more than 17 years. After graduating from Bournemouth University with a degree in Multi Media Journalism, Kavitha started her career in local and regional newspapers, before moving to consumer magazines and later trade titles, as well as PR. Specialising in pay and reward, she has been editor of a number of HR publications including Pay & Benefits, Employee Benefits, Benefits Expert, Reward and CIPP’s membership magazine, Professional. In June 2024, she won Pay, Reward and Employee Benefits Journalist of the Year at the Willis Towers Watson media awards. She was also named one of Each Person’s top 20 influential HR bloggers and managed a highly commended content team of the year in 2019.

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