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Altnet Hyperoptic to cut 5% of workforce amid UK broadband sector challenges

Written by Wed 21 Jun 2023

Hyperoptic, a UK-based full-fiber broadband and provider, has announced plans to reduce its workforce by 5%. Over 100 network engineers at the altnet are set to lose their jobs​​.

This decision comes as part of a strategic shift from network rollouts to enhancing customer connections​​.

The firm, backed by private equity giant KKR, employs approximately 2,000 people in the UK. The majority of job cuts will occur in Scotland and North West England where Hyperoptic’s network build is near completion​.

Despite these cuts, the company has stated that its funding is secure, emphasising that these changes have not been driven by KKR or economic challenges​.

In an attempt to mitigate the impact of these cuts, around 40 network build engineers are being redeployed to customer build and customer connection teams​. Hyperoptic is also removing a layer of management from its infrastructure division, aiming to expedite the build process​.

“In support of our continued growth at Hyperoptic, we have refocused around 40 employees on customer-facing engineering roles, and are proposing to make around 110 redundancies in the UK as we increase our focus on areas that offer us the greatest customer reach,” said Dana Tobak, the Founder and CEO of Hyperoptic.

Hyperoptic was founded in 2010 and was valued at £500 million, following KKR’s investment in 2019. The company had an initial goal of reaching 2 million homes across the UK by the end of 2023 with its fiber-to-the-premises (FTTP) network, but this target has now been pushed back to 2024.

While the company’s immediate focus is on connecting customers, it is also placing a greater emphasis on reaching new-build homes, having originally specialised in flat blocks​​.

Altnet providers struggle to keep pace

Hyperoptic is far from alone in announcing job cuts in the UK’s telecoms sector this year. Rival alternative network or altnet providers Zzoomm and CityFibre have also revealed plans to lay off hundreds of workers due to macroeconomic pressures​​.

Even telecoms giant BT has unveiled plans to reduce its workforce by around 55,000 jobs by the end of the decade, suggesting that many existing roles could be ultimately performed by AI​.

The UK’s vibrant fiber market has been booming with investment in recent years, leading to a surge in altnet providers battling against BT’s Openreach to deploy full fiber throughout the country​. However, Openreach’s rollout has advanced at a faster pace than initially expected, and the UK’s challenging economic environment has impacted altnets.

This trend of workforce reduction among altnet providers reflects the broader challenges facing the UK’s broadband sector, including soaring borrowing and build costs​. The strain has already led to consolidation within the market. Kent-based altnet company Trooli was acquired earlier this year by French infrastructure firm Vauban in a reported £100 million deal​​.

As the full-fibre rollout nears completion and old copper networks are shut down, it’s expected that the demand for engineers will continue to dwindle, echoing the anticipated job cuts at BT​.

The road ahead for altnets will require strategic adaptation to the changing landscape of the UK’s broadband sector.

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Written by Wed 21 Jun 2023

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