May 10, 2021

Vodafone Spain announces the dismissal of up to 1,200 workers, 25% of the workforce | Economy

Vodafone Spain studies to present a new ERE | Economy

Vodafone Spain has informed the workers' representatives of the opening of a collective dismissal procedure that will affect a maximum of 1,200 employees, 24% of the total workforce amounting to 5,000 employees, and has convened them to start the end of January of consultations, which will last for a month.

Measure, advanced by EL PAÍS in November past, it is justified by the operator for the obligation to reduce costs due to the fall in revenues and profits (Ebitda) due to the continuous reduction of prices as customers opt for new packages of services (fixed, mobile, Internet and television ) Low cost.

"In the current market context, the demand for services continues to grow exponentially and prices do not: close to 50% of gross adds are associated with low and medium cost offers, which forces Vodafone to have a structure of costs prepared to compete successfully in all segments, "the company said in a statement.

Likewise, Vodafone explains that in the current expectations of customers, "who demand an agile, simple and immediate relationship", they are looking for "a more simplified organizational model that reinforces the coordination and synergies between the teams".

"The procedure that starts today seeks, therefore, to reverse the negative evolution of the business, strengthen its sustainability, protect investment capacity and design a more competitive organization and better adapted to what customers ask," the statement added.

The operator hopes to reach an agreement with the unions so that the measure is as traumatic as possible. At the end of February or the beginning of March, once the mandatory period of one month of negotiations has ended, the dismissals will be effective.

New setting

This new adjustment of Vodafone personnel would occur in a bad commercial moment of the operator that has suffered the commercial war unleashed by its rivals Movistar and Orange after the decision of the company of not acquiring the Partidazo or the Champions League for lack of profitability. The strategy has produced a flight of customers from broadband, mobile and pay television.

In the first three quarters, Vodadone has lost 361,000 mobile telephony lines (of which 70,000 are for contracts), 134,000 fixed broadband customers and 108,000 for pay-TV. (total as of September 30: 11.6 million). The operator only has positive numbers in fiber, where it has gained 84,000 clients.

Cost reduction plan

The new CEO at the global level, Nick Read, announced at the beginning of this month, coinciding with the presentation of results, a plan to reduce annual operating costs by 1,200 million euros by 2021, although he did not specify in what areas the cuts. In addition, the group Vodafone has decided to reduce the value of its subsidiary in Spain by 2,900 million euros due to the re-evaluation of the future business expected due to "the current difficult commercial and economic conditions"

The operator already applied an ERE in September 2015, agreed with the majority unions UGT and STC, which represented the dismissal of 1,509 workers, 238 less than those initially proposed by the company, which justified the redundancies in the duplications that occurred after the purchase of Ono in 2014, and the absorption of the workforce of the cable company.

Prior to the acquisition of Ono, Vodafone already undertook another forced dismissal in 2013 when the company negotiated an ERE with the unions, which included the dismissal of 620 workers, the outsourcing of services, with 130 employees affected, as well as changes in working conditions for another 150 people.


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