Vodafone cuts 11,000 jobs
Vodafone has announced plans to cut a total of 11,000 jobs by 2026. In Germany, 1,300 jobs are to be eliminated. The reason for the measures is the company’s negative economic development.
Bad times for Vodafone
The British company has been weakening economically for some time – quite in contrast to its competitors. Vodafone shares, for example, have slumped by around 25 percent over the course of a year, and the global company’s overall operating profit slumped from 15.2 to 14.7 billion euros. In addition, the German business has recently seen a significant decline in customer numbers. While 65,000 new mobile communications contracts were signed in the second quarter of the financial year, which runs from April to March, the figure was only 8,000 in the third quarter, and 11,000 fewer in the fourth quarter. A similar trend was observed in the fixed-network area. Service revenue, meanwhile, decreased by 2.8 percent in the fourth quarter, a much stronger decline than before. By contrast, stable growth was observed at Telekom and Telefonica, the two largest competitors.
Job cuts and service orientation as solution?
Vodafone’s new chief Margherita Della Valle wants to counter the group’s weakness with job cuts and a stronger service orientation. “Our performance has not been good enough. To be able to deliver on a sustained basis, Vodafone has to change,” she stated. In the future, “customers, simplification and growth” are to be the company’s priorities. To this end, 11,000 of the total of around 90,000 full-time positions are to be cut globally. In Germany, the company’s core market, 1,300 jobs are to be cut, mainly in administration. Jobs with customer contact, on the other hand, are not expected to be affected. The focus of the redundancies is therefore likely to be the headquarters in Düsseldorf. In “management, in dual functions and in areas without direct customer contact,” employees may no longer feel secure in their jobs.
At the same time, Vodafone wants to create 400 new jobs in customer-facing areas in Germany. Both the redundancies and the new hires are to be completed by the end of March 2024. After that, no further layoffs are planned in Germany. Globally, however, the wave of layoffs will continue or be implemented until 2026.
Vodafone has also been countering the problems for some time with price increases. Reference was also made to the fact that network quality had been improved. The company also sees this as a step toward overcoming the problems.
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