TELECOMS company Lycamobile has informed nearly 90 per cent of its UK workforce that their jobs are at risk, leaving over 300 employees uncertain about their futures just weeks before Christmas.
Staff at Lycamobile's London headquarters were told on Friday that the company is facing “serious challenges” and plans to cut up to 316 roles, retaining only 48 employees in the UK, The Guardian reported.
Owned by multimillionaire businessman and Tory donor Allirajah Subaskaran, Lycamobile is known for its pay-as-you-go SIM cards catering to low-paid workers making international calls.
The company reported a £24 million loss in 2022, and auditors have raised concerns about its financial transparency. Additionally, Lycamobile is in dispute with HMRC over an alleged £51 million unpaid VAT bill and last year was fined £8.3 million in France for money laundering and VAT fraud, the newspaper reported.
Addressing staff, Lycamobile’s general counsel, David Dobbie, cited competition, cost inflation, outdated technology, and inefficiencies from overlapping UK and India operations as reasons for the cuts.
He noted that customer service roles and other services will likely be moved offshore, including to India. The consultation process is set to begin, with no dismissals planned before 31 January.
Dobbie stated the restructuring aims to achieve “significant cost savings” and sought employees' cooperation.
The job cuts are expected to affect various Lyca group businesses, including media, property, and its Bella Cosa restaurant chain.
A Lycamobile spokesperson confirmed that no final decisions have been made, adding that the changes are part of a strategic review to align with long-term growth goals and digital transformation, The Guardian reported.
