Vodafone Said to Plan Hundreds of Job Cuts at U.K. Division
Vodafone Group Plc, the world's largest mobile-phone company, plans to cut hundreds of U.K. jobs to reduce costs and protect earnings amid the economic slowdown, two people with direct knowledge of the plan said, Bloomberg reported.
The company aims to announce the measures on Feb. 24, said the people, who declined to be identified because the plans are confidential. The jobs will be eliminated at Vodafone's U.K. operations, the people said, declining to give a precise number.
Vodafone Chief Executive Officer Vittorio Colao, the 47- year-old former McKinsey & Co. partner who took over in July, is pushing managers to eke out more profit from existing operations. Earlier this month, he agreed to merge the Australian unit with Hutchison Telecommunications Ltd.'s operation in the country, where growth prospects are slim.
On Feb. 3, Colao said Vodafone was making progress on its plan to reduce costs by 1 billion pounds by March 2011 to protect earnings. The measures will have "some impact on headcount," he said at the time, declining to say how many jobs may be affected. The cuts would include "network rationalization" and lower spending in areas such as logistics and advertising, he said.
Simon Gordon, a Vodafone spokesman, declined to comment.
Vodafone on Nov. 11 slashed its full-year sales forecast for the second time in four months, while keeping its profit forecast, raising the full-year free cash flow prediction and increasing the dividend payment.
Vodafone's U.K. unit had a margin on earnings before interest, taxes, depreciation and amortization of 23.2 percent in the six months ended Sept. 30. In Germany, Vodafone's biggest market, the margin was 44 percent and in Italy 44.9 percent.