News: Vodafone to cut 2,000 employees while planning to create new roles for its cloud services

Talent Management

Vodafone to cut 2,000 employees while planning to create new roles for its cloud services

As per a spokesperson for the company, Vodafone has already axed 900 positions in Germany within the last two years.
Vodafone to cut 2,000 employees while planning to create new roles for its cloud services

Vodafone Germany is all set to remove or relocate 2,000 jobs as part of a cost-saving program aimed at saving €400m (₹33.65 billion) over the next two years. This initiative represents the latest effort by the German branch to restructure operational expenses and investments, aiming to enhance performance in the Group's largest market. 

The new two-year plan focuses on cutting "material, operating, and personnel costs" while directing increased investments towards areas that can enhance the customer experience. According to a spokesperson for the operator, Vodafone has already eliminated 900 jobs in Germany over the past two years. 

According to a news website Telcotitans, the upcoming reduction will lead to a 13% decrease in the OpCo's employee count, which currently stands at 15,000. Some positions will be relocated, while others will be impacted by the introduction of automation, which is anticipated to assume more manual tasks in the future. 

However, the spokesman emphasised that job cuts would constitute only a "minor part" of the total targeted cost savings. The majority of savings will be derived from initiatives such as streamlining complex structures and modernising network elements and IT systems. 

These efforts are aimed at transforming the operator into a "simpler, faster, leaner" organisation. In addition to the efficiency drive, the OpCo is prioritising the simplification of products and services and enhancing interaction options with customers. 

Key areas identified for investment include networks, streamlined product offerings, improved customer accessibility, advertising, and the development of Internet of Things (IoT) and cloud-based B2B services. 

While the overall headcount is expected to decrease, the operator intends to create new roles to support its cloud and IoT services, as well as customer-facing positions. However, specific details regarding the number of new positions to be created were not provided. 

Vodafone has undertaken significant "right-sizing" measures across Europe, including the potential exit from Spain, the sale of Vodafone Italy to Swisscom, and the proposed merger of Vodafone UK with Three UK, pending regulatory approval. 

Now, the focus has shifted to Germany. Despite recent growth, the German OpCo faces challenges due to customer losses in multi-dwelling units (MDUs). However, a turnaround is anticipated once the operator stabilises financially, with projections suggesting improvements by the fiscal year ending March 31, 2026. 

While MDU customer defections are expected, there has been noted acceleration in underlying service revenue growth. During an investor update on March 15, 2024, Della Valle highlighted the positive momentum in Germany and emphasized efforts to expedite this acceleration. 

The cost-cutting initiative marks one of the final actions of Vodafone Germany CEO Philippe Rogge, who is departing the company on April 1 after resigning on March 15 as part of a broader executive reshuffle within the Group. 

Rogge is recognised for initiating the initial phase of the OpCo's restructuring since assuming his position in September 2022. In March 2023, Rogge disclosed plans to Handelsblatt to reduce 1,300 jobs, primarily in administrative and management roles, while creating 400 new positions within the consumer division. 

Replacing Rogge is Marcel de Groot, who has served as Vodafone Germany's Managing Director of Private Customers since July 2022. De Groot will report to Ahmed Essam, transitioning from his role as Vodafone UK CEO to become the Executive Chairman of Vodafone Germany and CEO of European Markets. 

"Philippe and his team have made significant strides in revitalising Germany's growth and laying the groundwork for the turnaround... Marcel and his team are well-equipped to lead Germany into the next phase, characterised by unwavering execution and a robust commercial focus... It's imperative that we build upon our current momentum and continue to accelerate our commercial performance," stated Della Valle.

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Topics: Talent Management, #Layoffs, #HRTech, #HRCommunity

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