Virgin needs more than 'lipstick on a pig' at NTL

[BPO Business Intelligence]

Virgin needs more than ‘lipstick on a pig’ at NTL

PERHAPS NTL has started to believe its own bad publicity. Its poorly resourced customer service department has been the ridicule of the telecoms sector, even managing to make rival BT shine.

On Tuesday chief executive Steve Burch took drastic, but much anticipated, action and disconnected more than one-third of his workforce.

Most of the 6,000 will be laid off over the next 12 months to make way for a new slimmed down business after the merger with Telewest and acquisition of Virgin Mobile.

While many of the job cuts will come from back-office duplication, half will be outsourced. This is a mistake. What’s left of NTL’s customers might feel its service could not get any worse, outsourcing the public contact point of the soon-to-be reborn business is a risky strategy.

I should say at this point, I have been a happy NTL customer for about five years and only ever experienced efficient customer service. But many have not: NTL is one of three internet service providers criticised by a YouGov survey for poor service.

Last week’s layoffs are typical of a business that is struggling to integrate acquired assets quickly. It is right that NTL is keen to take costs out of its recent mergers, and slashing the headcount and outsourcing its support is an obvious short-term solution.

But making the cuts so quickly, before it has got to grips with the bones of the new structure, is a mistake. There is a very real danger it will lay off the wrong staff or too many, having to fork out to recruit and retrain further down the line.

It would not be the first time a business acted too fast – many feel GCap, Britain’s troubled radio group, lost the wrong staff at a senior level when Capital Radio came together with GWR.

NTL may well have bitten off more than it can chew already with Telewest, and it could be buying just more problems.

Too many businesses see outsourcing as an easy way out to save money rather than help the business move forward.

There is nothing here to suggest NTL has done anything ­different. One of its key differentiators, where it can add value, and help it to make ground over rivals BT and BSkyB, which already have more than a head start, is through its customer service.