UK-based multinational telecom company Vodafone plans to lay off 11,000 jobs as it wants to create a leaner and simpler organizational structure. The job layoffs are a part of the company’s strategic plan that will be implemented over a period of three years. The layoffs are expected to save Vodafone around €1 billion (£870 million) per year.
The layoffs are part of a broader restructuring effort by the company, which is struggling to compete in a rapidly changing telecommunications landscape. The job cuts will come from across Vodafone’s global workforce, with the biggest reductions expected in Europe and the United States.
The company’s new CEO Margherita Della Valle also stated the reason behind the move to be the FY23 performance that has not been satisfactory. In the financial report of FY23, Della said that the company has to regularly deliver and its priorities in the coming years are customers, simplicity, and growth. By simplifying the company, and removing the complexity to compete with others, Vodafone aims to provide quality services and drive future growth from the unique standing of Vodafone Business.
Vodafone is not the only telecommunications company that is struggling. The industry is facing increasing competition from new entrants, such as Google and Amazon, as well as from traditional rivals, such as AT&T and Verizon. In order to compete, telecommunications companies are under pressure to cut costs and invest in new technologies.
Vodafone has reallocated important investments in FY24 towards branding and improving the customer experience. Vodafone is also planning to sell off some of its assets. The company said that it is looking to sell its businesses in Turkey and Egypt, as well as its stake in a mobile phone tower company in Italy. The proceeds from these asset sales will be used to reduce debt and invest in new growth areas.
The restructuring at Vodafone is a major project. The company is hoping that the changes will help it to become more competitive and to return to profitability. However, the job cuts and asset sales are likely to have a negative impact on employees and customers. It remains to be seen whether the restructuring will be enough to save Vodafone.
Employees who were laid off will face financial struggles. They may not only have to find new jobs but also find it difficult to live in a competitive job market. They may search for other jobs and also may get ready to take pay cuts and reductions in benefits. Vodafone may have to reduce the number of customer service representatives or the number of stores. This could lead to longer wait times for customers to get help or find the products they need.
The company’s stock price may decline as investors react to the news of the job cuts. This could make it more difficult for Vodafone to raise capital in the future. These layoffs show how the telecom industry is going through a huge changeover to survive and sustain in the challenging times in the post-pandemic world. Transformation is costing the quality of lives of not only the customers but also the employees who work hard to scale up the company at all times.