MVNO Lycamobile has warned its staff that 90 percent of its UK workforce could lose their jobs.

As reported by The Guardian, staff at the company's headquarters in the City of London were told that the business was facing “pretty serious challenges” and was planning to cut up to 316 jobs, leaving as few as 48 in the country.

1024px-FSE_Computer_World_Lycamobile,_Garratt_Lane,_Earlsfield,_London_01
– Wikimedia/Edward Hands

Lycamobile operates in 22 countries and claims to serve more than 16 million customers worldwide. In the UK, Lycamobile offers mobile services via EE's mobile network.

Founded in 2006 by Subaskaran Allirajah, Lycamobile specializes in selling pay-as-you-go SIM cards.

The Guardian reports that the company’s general counsel, David Dobbie, blamed competition, inflation, “legacy technology issues," and internal inefficiencies due to overlap between divisions based in the UK and India.

Lycamobile reported a loss of £24 million ($30m) in 2022, the last year in which its accounts are available.

The company has also been locked in a dispute with the HMRC over an alleged unpaid £51 million ($64.6m) VAT bill. A tribunal earlier this year ruled in favor of the HMRC.

In France, the company was hit with a £8.3 million ($10.5m) by a Paris court for money laundering and VAT fraud.

Dobbie reportedly told staff that some services will be cut in the UK, including customer service, which will be moved to India.

He added that a consultation on jobs will start straight away and that no jobs will be lost before January 31, 2025.

“This proposed expansion of global service centers is going to unlock significant cost savings for us,” he said, asking for the support of staff to “make this no harder than it needs to be."

Lycamobile told The Guardian that "no final decisions have been made," while it has no material updates on its HMRC matters.

The MVNO's founder was a key donor to the UK Conservative Party between 2011 and 2016, donating £2 million ($2.54m).

Allirajah had also met former Prime Minister Boris Johnson on multiple occasions, with Johnson previously criticized for meeting with Allirajah, amid the company's money laundering investigation in France.