Vodafone Confirms 500 Job Cuts

Tuesday, February 24, 2009 - Vodafone confirmed yesterday that it is to cut about 500 jobs in Britain, making it the latest corporate heavyweight to slice its workforce in the face of the recession.

The telecom company's cuts represent about 5% of its 10,000-strong workers in UK and come as part of a £1bn cost-cutting drive. The redundancies will include 170 jobs at the company's headquarters in Newbury, Berkshire, and 180 in Stoke-on-Trent, with the remainder at Banbury and Warrington.

Vodafone said cutting its operating costs would allow it to compete more effectively in the Britain market.

"The majority of savings will be achieved by taking operating costs out of the business, however, there will also be a reduction of approximately 500 jobs across the business," the company said in a statement.” Staff affected by the decision have been informed today.

"New roles are being created to develop total communications services and solutions and in addition the retail estate and online services will be the focus for ongoing investment."

Vodafone workers union urged the company to help retrain or redeploy any staff made redundant.

"Where redundancies are absolutely unavoidable, then we will be pushing the company to pursue a voluntary approach and to establish fair and transparent selection criteria," said the Connect union, which represents several hundred managers at the company.

Steve Thomas, Connect's national officer for Vodafone, said: "We will be working very closely with the company to ensure that our members are treated with respect during this difficult time and that a full and proper process of consultation is carried out."

The Vodafone announcement comes as broadcaster ITV lines up a potential 500 redundancies on top of 1,000 jobs it has taken out of the business in recent months.

Thousands of bank workers also face redundancy as Royal Bank of Scotland and Lloyds prepare to report their results this week.

Other companies that have recently shed jobs include the mining group Anglo American, which announced last week it was cutting 19,000 posts.

Unemployment rose to 1.97 million said last week by the Office for National Statistics in the three months to December, and many analysts are predicting it will reach 3 million by the end of the year.

Vodafone warned in November that jobs would go as part of a company-wide push to cut costs by £1bn by March 2011. Earlier this month it said approximately £500m of these cost savings were likely to be generated by the end of the 2010 financial year.

Vodafone employs 70,000 people worldwide, but any job losses are likely to be implemented on a country-by-country basis. Its international business spans the mature European markets of Italy, Germany and Spain and emerging markets such as India, where it has been looking for growth. But tough trading in Europe and slowing growth in the emerging markets have prompted an economy drive.

Vittorio Colao, the chief executive, who took over from Arun Sarin last year, wants to focus on improving profitability rather than chasing revenues and expanding Vodafone's geographic footprint through major acquisitions.