Vodafone Germany to cut 500 jobs as competition bites

Vodafone Germany confirmed plans to cut 500 jobs as the company battles to "remain a premium company" in an increasingly hard-fought mobile market.

A Vodafone spokesman told FierceWireless:Europe that the company has to take such measures to remain fit for business in the face of competitive mobile prices and a reduction in mobile termination rates.

As things stand, the plan is to implement the cost-cutting measures over two years, starting this year, by transferring some activities to other countries. For example, Vodafone Germany has already transferred network monitoring activities for its mobile network to Romania and now plans to do the same for its fixed network. Some IT jobs will also be transferred to India, the company said.

At the same time, the company plans to reduce the starting salaries of newly recruited staff by setting up its own customer services company and introducing a new salary structure. The spokesman, who said Vodafone Germany pays up to 80 per cent above the market average, said around 2,500 jobs would be transferred into the new company. He noted that all plans are still subject to discussions with employee representatives.

German daily Frankfurter Allgemeine Zeitung noted that the operator is also increasingly centralising its operations in Germany. Last December, Vodafone Germany moved into a new campus in Düsseldorf and in the future will control all network planning and operational activities from there. Around 5,000 of the company's current 11,000-strong workforce currently work at the new headquarters, the paper said.

It's not clear how much the company expects to save from all these measures, but CEO Jens Schulte-Bockum made it clear in the interview with FAZ that there was "no alternative" to this restructuring programme; he said the company had to act now and invest in its network and quality of service. FAZ noted that the company expects to invest more than €1.2 billion in its LTE network alone this year.

In Germany, Vodafone competes with rivals Telefónica's O2 Germany, Deutsche Telekom and E-Plus, which in turn has launched discount provider Yourfone. Telefónica unveiled a raft of all-inclusive tariffs at Mobile World Congress in February, and this week Deutsche Telekom also announced changes to its tariffs.

Starting May 22, DT will offer just one range of all-inclusive tariffs for voice, texts and data: Complete Comfort XS to XXL, ranging from €49.95 euros ($65) to 99.95. The company said it will offer customers who already own a mobile device a 20 per cent discount and add free data access to all packages.

For more:
- see this Frankfurter Allgemeine Zeitung article (translated by Google Translate)
- see this Reuters article
- see this separate Reuters article

Related Articles:
Vodafone's Colao: We don't need to sell Verizon stake to bolster European markets
Report: Kabel Deutschland will not oppose Vodafone takeover
Vodafone's Q3 torpedoed by European weakness
Report: Vodafone could make bid for Kabel Deutschland within days
Report: Vodafone preps takeover of giant cable operator Kabel Deutschland
Vodafone boosted by talk of cable purchase and Verizon sale rumours

Suggested Articles

Sprint said it will offer discounted service to customers age 55 and above.

Unlimited data plans placed a strain on carrier networks last year, but according to OpenSignal the carriers met the challenge.

Verizon plans to bring 5G to four U.S. cities this year and hopes to have standards-based equipment in place for some of those deployments.