Anger at Virgin Media bonus plan after job cuts
Published 13/04/2009 | 12:55
Cable group Virgin Media has angered unions with plans to award bonuses to its executives just months after axing more than 2,000 jobs, it was reported today.
The group has approved plans to pay bonuses worth between 5% and 100% of base salary to some staff dependent on qualifying criteria.
Virgin Media, which released details of the move in a filing to the US Securities and Exchange Commission, said last November that it planned to cut around 2,200 UK jobs - or 15% of its workforce - by 2012 in a sweeping restructure of the business.
Unions attacked the move and called for the firm's bosses to reconsider.
Grace Mitchell, of the Communication Workers Union, told The Times: "At a time when people are losing their jobs and there is a lot of uncertainty, the executives should be taking a lead and looking to forgo these bonuses."
The redundancies are part of a plan to slash costs across the group to save more than £120 million by 2012.
Virgin Media posted a quarterly loss of £50.2 million in February after a £54.8 million write down at its home shopping arm Sit-up.
The group sold Sit-up, which trades as bid tv, price-drop tv and speed auction tv, to German restructuring firm Aurelius earlier this month.
The bonus plan will affect around half of Virgin Media's employees, including its executive officers, and will be dependent on staff attaining various performance targets.
"In order for any bonuses to be payable, the company must first achieve a qualifying financial performance target," the firm added in the Securities and Exchange Commission statement.
Virgin Media has said it would not start cutting jobs until the fourth quarter of this year, with the majority of the role reductions taking place before the end of 2010.
The job losses come as part of a group-wide overhaul following a review last year made in the wake of the firm's formation by the merger of Telewest and ntl in 2006.