Competitive Telco market: Vodafone is cutting around 2,300 jobs in Germany

Vodafone is cutting almost one in five jobs in the company as part of a far-reaching savings and restructuring program. Photo: Thomas Banneyer/dpa/dpa-tmn

Dusseldorf. The telecommunications group Vodafone is implementing a far-reaching savings and restructuring program in Germany. As German boss Marcel de Groot told the workforce, around 2,300 jobs are to be cut or relocated over the next two years as part of a comprehensive realignment. With a total workforce of around 12,000 employees, this corresponds to a share of a good 19 percent - almost one in five jobs is affected by the cuts.

The Düsseldorf network operator justified the package of measures with the need to simplify structures and make the company more effective again after years of significant customer decline. In addition to savings in material and operating costs, the personnel area in particular should contribute to reducing costs. This should also be achieved through the increased use of AI.

Previous changes are not enough

Vodafone has achieved a lot in the past two years, said de Groot. “We have stabilized our business, are gaining momentum again in the business customer area and are getting better and better with our products, networks and services.” But the truth is that none of this is enough. “Because our market is changing fundamentally and at a speed that we have never experienced before.”

The Vodafone manager emphasized that competition is becoming tougher: “For us this means: What has worked so far does not automatically ensure our success tomorrow.”

Administrative areas, management levels and dual structures, which were created, among other things, as a result of previous acquisitions such as that of the cable network operator Unitymedia, are particularly affected by the dismantling. Manual workflows and standardized processes will be increasingly automated in the future.

Investments in growth areas despite austerity measures

Despite the reduction in personnel, Vodafone wants to make targeted investments in promising segments. The company is positioning itself even more strongly in the fiber optic, cloud and security business for business customers. "Digital customer channels will be expanded to improve customer experience and customer loyalty. AI will reduce costs in the company and strengthen sales in new business areas."

The background to the austerity measures is the intense cut-throat competition on the German telecommunications market. Vodafone had lost market share to competitors in the landline and broadband business. The abolition of the additional cost privilege for cable television brought additional pressure on margins, which reignited competition for millions of TV customers.

The competition also saves

Vodafone's competitor O2 Telefónica had already imposed a tough austerity program last summer. This year, 1,100 jobs are expected to be eliminated, roughly one in six jobs at O2. At the beginning of the year, the company had 6,820 full-time positions. Employees should leave voluntarily, for example through early retirement and severance pay. In addition, 60 of the 800 O2 shops are to be closed.