Things are not going well at Vodafone. While the competition boasts good figures and has significantly more customers than before, the British company is losing ground.
The British telecommunications group Vodafone is initiating job cuts in view of declining customer numbers and falling profits. Within three years, 11,000 jobs are to be cut worldwide, as the company announced in London on Tuesday.
Vodafone currently has around 90,000 full-time positions, so on average every eighth will be eliminated. In Germany, by far the most important market for the British group, the cut should not be as drastic as elsewhere: Of the 14,300 jobs in Germany, 1,300 full-time jobs are to be cut by March next year. That was already known before.
Savings are to be made primarily in administration
“Our performance was not good enough,” CEO Margherita Della Valle justified the cuts. “In order to be able to deliver permanently, Vodafone has to change.” Her priorities are “customers, simplification and growth”. Complexity will be removed “in order to regain our competitiveness”.
In Germany, savings are mainly made in administration – the German headquarters in Düsseldorf with around 5000 employees should be the focus here. In “customer-related areas” – such as service and technology – on the other hand, 400 jobs are to be created. The bottom line is that the number of employees will fall by 900 within one year as planned. After the completion of this project at the end of March 2024, there will be no further cutbacks in Germany, but the global cutback plans will run until 2026.
Vodafone is under pressure – service revenue in Germany fell by 2.8 percent in the fourth quarter, more than before. While the competitors Deutsche Telekom and Telefónica (O2) are on the rise, Vodafone is weakening. The figures published on Tuesday for the fiscal year running from April to March show that things are going downhill. The number of mobile contract customers rose by 65,000 in the second quarter, by just 8,000 in the third quarter and by 11,000 in the fourth quarter. The development was similar for fixed-line customers.
Landline and mobile phone networks have been improved
With the competitor O2, for example, the trend is going in the opposite direction: In the last quarter of 2022, Munich gained 264,000 mobile contract customers and in the first quarter of 2023 it was even an increase of 368,000.
With a view to the German business, Vodafone emphasizes that measures have been taken. The company emphasizes that the landline and cell phone networks have been improved. In addition, Vodafone relies on price increases to get more money into the till.
All in all, things are not looking rosy for the British telecoms group, which also operates in countries such as Spain, Italy, South Africa and Egypt, as well as the UK. In the past fiscal year 2023, the reported operating result of the global group (Ebitda AL) shrank from 15.2 billion euros in the previous year to almost 14.7 billion euros. The company justified this primarily with higher energy costs and poorer business development in Germany.
Source: Stern
