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Virgin dumps staff to keep head above water

New economy sheds more dead wood at Virgin

Virgin's ISP Virgin Net has announced it will lose a quarter of its staff by the beginning of next year.

The move comes four months after Virgin Net said it was selling its ISP business, which has 500,000 subscribers, to NTL for a reported £100 million. Virgin Net will focus exclusively on developing the business as an entertainment and shopping portal, which in lay terms means it can get on with marketing like mad.

"Our decision to restructure in this way has been taken following an in-depth review of the way we operate," said Alex Heath, managing director of Virgin Net. But then, it's unlikely Heath would be allowed to sack 25 percent of his staff on a whim.

The layoffs will not affect any of the Virgin Net ISP employees moving to NTL once the sell-off is complete at the end of the year. They will, however, affect the portal side of the business, which is being folded into Virgin.com in an attempt to make Virgin's internet division profitable by 2002.

When Virgin Net was launched in 1996 it was one of the first UK ISPs to attempt to provide both internet access and content in order to compete with the likes of AOL and Compuserve.

The consultative process that Virgin Net announced today is a European Union requirement for redundancies that affect more than 20 people. A spokesman for Virgin Net said the company would do everything in its power to find other jobs within the Virgin Group for the people affected.

The layoffs come as Virgin Net is experiencing some success as a shopping portal. A spokesman said the portal is receiving a million unique visitors a month and 150,000 users have registered with the site in the last six weeks.

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