It will be a while before anything happens on the O2/VM merger, because they can't do anything until the competition authorities have given approval, and that won't happen until December at the earliest, delays are highly probable, and only after that can they start planning. And before they can move VM mobile customers to O2, there's the complication that VM signed an agreement last year to move all VM mobile customers from the BT/EE physical network to that of Vodafone. Untangle that one, you fools!
If they do get approval (which is likely), that's really bad new for both company's existing customers. They've promised investors that the deal will result in savings of £540m a year. I'd reckon about ten per cent of that would be benefits of a single advertising and marketing budget. Ten per cent will be avoided external network traffic costs. Twenty per cent will be head office and support functions like HR, finance, procurement etc. So I'm guessing sixty percent of that will be customer-facing staff and related costs like buildings and facilties, IT, line management, training, payroll taxes and so on.
Take that 60% of £540m, and you get £324m. An indicative "fully loaded" staff cost for a UK customer service business is about £35-40k (yep, all those on-costs almost double what the lowest paid front line workers actually see). So that's about eight and a half thousand jobs that will be cut. We already know VM don't care about the quality of customer service. They can't make any savings on the offshore costs, because that's already the most bargainy of bargain basement operations - if you're so inclined you can find the recruitment ads for the Indian outsourcer that VM use, and that shows they pay far less even than the Indian outsourcer averages. Any staff working in call centres for Virgin Mobile (UK, offshore, directly or outsourced) should recognise that O2 will be the "winner" when they decide which "mobile" call centres to shut. In most mergers customer service goes to the dogs, staff are demoralised, management distracted by crap like "rebranding", fighting over roles in the new "target operating model", looking for those elusive synergies, and because the synergies are often optimistic, customers are expected to pick up the tab for the vast deal costs (£700m-£1bn, including merger costs, deal fees and related costs like legal, banking and advisory).
Most of VM's non-mobile large customer service sites should survive, but when management are scrabbling around to find that £540m, nothing should be taken for granted. Sooner or later they'll want to bring the sales and retentions teams together (and "rationalise" them). O2 are (like VM) an enthusiastic believer in the magic of cheap, crap, poorly skilled offshore labour, both companies have similar stinky customer ratings on Trustpilot, and both companies have messy, dysfunctional IT and web presence, so you can be sure that this merger won't be a new dawn of glorious, effective customer service.
But all of this is a couple of years away yet.
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