Telecoms giant Vodafone plans to axe 11,000 jobs as part of a drive to increase profitability.
The recently installed CEO of the company, Margherita Della Valle, said that ‘(our) performance had not been good enough. She went on to say that her priorities were ‘customers, simplicity and growth.’ She also pledged to ‘simplify’ the organisation, and cut out ‘complexity’ to ‘regain (our) competitiveness.’
The cuts will hit Vodafone’s UK operations, with the company’s Berkshire-based HQ confirmed to be amongst the parts of the business affected. However the full scope of the cuts have yet to emerge.
The announcement comes after Vodafone endured a 1.3 percent drop in earnings to 12.8bn. The fall in earnings has been impacted by the increased cost of doing business, sluggish growth in primary markets such as Germany; as well as Spain and Italy where it has failed to match the performance of its rivals.
At the same time, customers in the UK market have experienced problems with its broadband services. Embarrassing data released by industry watchdog the Office of Communications (Ofcom), revealed that Vodafone’s broadband was the second most complained about of any of the country’s major providers in the last three months to December 2022. The feedback came on top of a major service outage that occurred in April of the same year.
Vodafone’s plans are the latest in a series of announcements made by major employers with interests in the UK market. Broadcasting group Sky is said to be considering hundreds of job cuts with satellite installation engineers and customer service staff expected to be amongst those hit by the decision. Meanwhile, car manufacturer Ford has said that that 1,300 jobs will go as part of its plans to transition to electric vehicle production by 2035.
The Workers Union Says…
The operating environment for business is tough. Consumer confidence is at a low ebb, and firms face pressures ranging from complex geo-political problems to meeting green targets set by politicians.
In such a climate it would be foolish to assume that companies can, or will, remain unchanged. But it’s also easy to forget the human cost of the decisions made by those that run them. Working people are the greatest resource available to any business. Their innovation and hard work is the motive force behind every company’s success story, yet they are the ones to suffer when execs get spooked by contracting markets.
Sometimes difficult decisions have to be made, but big companies often remain profitable despite drops in revenue. In this situation, company chiefs must ask themselves if shareholder dividends are more important than showing loyalty to the people that make them possible.