Lycamobile has slashed its UK workforce to 90% and put more than 300 jobs in danger just days before the Christmas holiday.
The London-based telecoms company told its staff that they faced “pretty significant challenges”. The redundancies could reach 316, leaving only 48 employees in Britain.
According to The Guardian, Its general attorney David Dobbie attributed the reductions to inflation, competition, and legacy technology problems.
He said in a staff meeting held last week that a consultation process would be launched soon, but warned it could take time. He added that no one would lose their job before the 31st of January 2025.
The Lyca Group is likely to make redundancies in several areas, including media, real estate and the Bella Cosa Restaurant chain.
Customer service is one of the UK services that will be cut. It will be moved offshore to India and other countries.
Dobbie, who asked for employees’ support to “make it no harder than necessary”, said that “this proposed expansion of global services centres will unlock significant savings for us.”
Lycamobile, founded by Sri Lankan entrepreneur Subaskaran Allirajah claims to have 16 million users in 22 countries worldwide.
The company sells pay as you go sim cards that are primarily aimed at low-paid employees who want to call low-cost in the UK or overseas.
The company has lost PS24m in 2022 and is engaged in a long running battle with HMRC regarding an unpaid tax bill of allegedly 351m.
The French company was fined 8.3 million euros for money laundering and fraud on the VAT.
Lycamobile’s spokesperson stated: “Lycamobile, like all UK companies, reviews its business model continuously to ensure the best service for its customers.
“At this time, no final decisions have yet been made regarding any changes to our current model. However, we have announced that a consultation process will be conducted to discuss strategic changes in order to align our growth goals with the challenges our business faces and those of other telcos. This includes a focus on digitization.”
The spokesperson said that the company’s dealings with HMRC continue and there is no update on the current situation.
