City-focused ISP Hyperoptic, which since 2011 has built an alternative full fibre (FTTP/B) network to reach “more than” 1.73 million homes in parts of 64 UK towns and cities, has informed its staff that 2025 will see a “reduced volume of work” and thus a potential reduction in their infrastructure teams of nearly 130 jobs (out of nearly 280 potentially impacted roles).
The operator, which at the last update in July 2024 said they were home to a customer base of 340,000 (with a target of 500,000 for some point in the future), was previously known to be aiming to cover 2 million premises with their gigabit broadband network by the end of 2024. But we remain unsure of how close they are to that figure.
Hyperoptic previously suffered a modest sized round of redundancies in mid-2023 (here), but since then they will have also been coming under pressure from the same challenges as other operators (i.e. high interest rates, rising build costs and strong competition from rivals in the same space). In addition, we also saw a smaller number of job cuts in the latter half of 2024, but this was only a little above ‘business as usual’ levels.
The company’s most recent financial results (here) confirmed that high interest rates had helped to fuel a total loss for the year of £142m (e.g. the interest due on their loans reached £66.85m, up from £27.66m in 2022). But the operator had still been continuing to expand their network, which is very capital intensive. Revenues also grew by 19% to £93.4m and their customer base jumped 17%.
However, much as we remarked in October 2024, Hyperoptic really needed a big surge of new investment, or it would have to increasingly switch away from new build and move more toward greater commercialisation like other altnets (i.e. growing their customer base).
What’s the latest development?
Information leaked to ISPreview reveals that, toward the end of last week, Hyperoptic’s staff were notified that the operator was expecting a “reduced volume of work … in some areas” (build) during 2025. The operator said this meant they’d “need fewer managers overall” and that it would result in “appropriate changes to the UK Infrastructure teams” supporting their roll-out.
The announcement questioned whether Hyperoptic itself was “using our money wisely” by maintaining current team sizes and then admitted that, after “very careful thought“, some people would be losing their jobs. But it wasn’t all bad news, as up to 30 new roles will also be created, which might be suitable for some of those whose role is now at risk.
The proposed changes indicate a potential reduction of less than 130 roles from their UK-based Infrastructure team (there are almost 280 people whose roles are impacted), which mostly impacts manager, support and some engineering roles. The consultation process for this is only just getting underway, and thus a final redundancy figure isn’t yet known.
Dana Tobak, Founder & CEO of Hyperoptic, told ISPreview:
“As is often the case for a mature business such as ours, we regularly review our processes and how our teams are structured, to ensure we remain on track to deliver against our business plan. Following our most recent review, we identified further opportunities to improve the way in which we support our partners and customers. These improvements require organisational changes (that will include redundancies) which we are in the process of implementing. Naturally, this has been a tough decision to make and we are supporting impacted people throughout the process.
With our target of 2m homes passed well within our sights, we have entered the next phase of our growth strategy: to continue to deliver a five-star customer experience to many more customers. To support this ambition, we are continuing to work with and grow our relationships with new build developers, freeholders and management companies to bring our services to more homes and businesses.”
The decision to cut jobs as they near their current build completion is understandable. At the same time, the provider could also be said to have a stronger and more established economic base than many of today’s significantly younger altnets, which affords them some stability.
On the other hand, it wasn’t so many years ago that Hyperoptic were promoting a somewhat overly ambitious target of reaching 2 million UK homes by the end of 2021 and 5 million by 2024. The provider may well be continuing some build going forward, albeit at a reduced pace and scope, although it’s currently unclear how far beyond that 2m figure they’ll go.