Tiscali Set to Lay Off 40% of UK Staff

A report in the Times today indicates that the British arm of Tiscali, the troubled Italian broadband group, is preparing to cut hundreds of jobs, with up to 40 per cent of the workforce being laid off.

The group, which is borrowing money from SilverPoint, the American hedge fund, at 11 per cent, admitted yesterday that it is in a “consultation period” over job cuts after its tie-up with Homechoice, the video-on-demand player, but it declined to discuss numbers.
Around 800 people work in the combined Tiscali UK and HomeChoice businesses.

The tie-up with HomeChoice, which was announced last month, was seen by analysts as a last-ditch attempt for survival by the Italian broadband player, which has been forced by financial restraints to curtail its pan-European ambitions rapidly.

A new push in the UK is expected to form the centrepiece of a new business strategy by Tiscali to be announced by the group next month. By better distinguishing its UK offering, the group, which has 1.3 million broadband customers, hopes to better retain customers and win new ones. It hopes to boost its takings by providing a version of the service on a wholesale level.

However, analysts believe that the combination of several fierce, well-resourced competitors and its own financial restraints mean that the plan is misguided.