Li Ka-shing’s U.K. Carrier Cuts 7% of Workforce in Revamp

(Bloomberg) -- CK Hutchison Holdings Ltd., the Hong Kong-based conglomerate founded by tycoon Li Ka-shing, is cutting about 280 jobs at British phone company Three under new Chief Executive Officer Robert Finnegan.

The decision mainly affects head-office staff in the U.K. and represents a roughly 7% reduction to the company’s 4,300 workers, a spokeswoman for Three said in response to questions.

CK Hutchison, which gets about half its revenue from Europe, has seen its share price plunge by a third this year as the pandemic and political unrest in Hong Kong undermined its energy, retail, ports and real estate businesses. In August, Chairman Victor Li said controls on costs would be “stringent but flexible” after profit fell 29% in the first half and forecast declines for ports and retail in the second half.

While the conglomerate’s telecommunications businesses have been less vulnerable to the pandemic, CKH Group Telecom profit slumped 15% in the first half, while active customers at European carriers under 3 Group Europe fell 7% to 38.7 million.

CK Hutchison also said in August it had seen “meaningful improvements” in its U.K. telecom business from senior management changes.

Finnegan took the reins of Three U.K. in March and continues to head up its sister wireless company in Ireland, which he has run since 2005.

In August, Finnegan told Bloomberg the British mobile market would benefit from consolidation. The Hong Kong-based conglomerate successfully merged Ireland’s Three with Telefonica SA’s Irish carrier O2.

In the U.K., Three might have to look elsewhere for partners, since Telefonica struck a deal in May to combine U.K. carrier O2 with Liberty Global Plc’s U.K. cable company Virgin Media.

The company is also discussing ways to align its U.K. and Ireland businesses, the spokeswoman said.

“As part of our ongoing transformation, we are consulting on changes to make our business the right size to serve our customers’ needs and drive greater alignment between the U.K. and Ireland,” she said.

“We are seeking to minimize redundancies wherever possible through not back-filling vacancies and the removal of contractors’ roles,” she added. “We recognize this is an unsettling time and are fully supporting our staff through it.”

(Adds company background in third paragraph. Earlier version of story corrected spokeswoman quote in penultimate paragraph.)

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