No job cuts planned at Vodacom
Vodacom said it would not be affected by the new Vodafone CEO Margherita Della Valle’s plan to cut around 11,000 jobs.
Della Valle unveiled a plan to revive growth at the telecom giant, pledging to slash jobs and simplify the company’s corporate structure.
Over the next three years, Vodafone will cut about 11,000 roles across the roughly 104,000 people it employs.
Della Valle, a 29-year Vodafone veteran who previously served as CFO and interim CEO, is charged with turning around the company.
Vodafone has suffered from a lagging share price and difficulty consolidating its sprawling global operations.
She said she would reallocate resources to focus on the “quality service our customers expect” and grow the Vodafone Business unit.
“Our performance has not been good enough. To consistently deliver, Vodafone must change,” she said in a statement.
“My priorities are customers, simplicity, and growth. We will simplify our organisation, cutting out complexity to regain competitiveness.”
Vodacom told Daily Investor it currently has no plans to reduce headcount despite the inflationary pressures across the business.
“The operating environment that we face requires an unwavering focus to deliver our strategy, to meet our business objectives and to serve our customers,” Vodacom said.
“We continue to ensure that we have the right measures in place – including our commercial initiatives and cost efficiency programmes – to help mitigate the impacts of the global macroeconomic risks.”
Vodacom highlighted that Vodafone’s role reductions announced would be effected across Europe only.
Vodacom not for sale
Vodafone has a majority shareholding in Vodacom, and recent media reports speculated that it was looking to sell the African telecommunications giant.
In December 2022, Bloomberg reported that Emirates Telecommunications Group (Etisalat) is exploring a potential investment in Vodacom.
Etisalat is headquartered in Abu Dhabi, United Arab Emirates, with operations in 16 countries across Asia, the Middle East, and Africa.
According to the report, Etisalat wants to increase its international footprint, which makes Vodacom a logical target.
Etisalat is reportedly looking at the feasibility of buying all or only a part of Vodafone’s majority stake in Vodacom.
Combining some of Etisalat’s African operations with Vodacom to create a continental telecommunications giant is also being considered.
In May 2022, Etisalat disclosed that it had spent $4.4 billion for a 9.8% stake in Vodafone. It announced in December 2022 that it had increased its holding to 11%.
Earlier this month, Vodafone and Etisalat announced a strategic relationship that brings the two operators closer together in certain aspects of their businesses.
As part of this strategic relationship, Vodafone and e& (Etisalat) have entered into a relationship agreement that establishes e& as a cornerstone shareholder of Vodafone.
It sparked renewed speculation that Etisalat is set to acquire a majority shareholding in Vodacom to create an emerging-market telecommunication and mobile-money powerhouse.
However, Joosub told analysts at its annual results presentation on Monday that Vodafone remains committed to Vodacom and does not want to sell the company.
“We recently had a visit from the whole Vodafone board, and the messaging was very clear – Vodacom is not for sale,” Joosub said.
Reporting with Bloomberg.