BT's mmO2 mobile arm is to cut 1,900 jobs across the UK and Germany in the company's first major independent action since its inception last autumn.
Formerly known as BT Cellnet, mmO2 also has plans to close 133 of its existing 320 High Street stores. The cuts will affect sales and administrative staff.
The company blamed market conditions, and estimated that the restructure will save £70m a year.
Chief executive officer Peter Erskine said: "Today's announcement is in line with our declared strategy of improving the operational performance of our businesses.
"Our imminent rebranding to O2 across Europe is much more than just a change of name, as we concentrate our efforts on increasing and communicating the benefits O2 customers gain through our voice, text and mobile data and internet services."
The move follows similar culls by rivals Vodafone and One2One, but mmO2 said that it had gained 453,000 new subscribers in the third quarter of last year, slightly below analyst expectations.
The restructuring will see 1,400 staff go from its UK operation leaving it with 6,100 employees, and 500 from VIAG Interkom, its German company, leaving it with 3,400 workers.
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