The job cuts, which will include sales and administrative staff, will cost £110m and save about £70m a year, according to MMO2 chief executive Peter Erskine. The company also plans to close 133 retail outlets in the UK.
MMO2 said the move was needed to stem losses and support developments in the mobile sector, which was moving from volume sales towards the provision of increased service and support for established users.
About 1,400 UK jobs will be lost, covering back office, retail, technical and administrative staff.
MMO2 will take a £110m hit to cover the cost of the job losses and restructuring, which is expected to save £70m a year.
The company is also looking to save on its £8bn capital expenditure budget by signing network-sharing agreements with rivals.
Meanwhile British Telecom has admitted it is in advanced negotiations to outsource its PC support and maintenance in a five-year deal with Computacenter.
Once the deal is finalised, some 377 staff will transfer to Computacenter at the end of March.