Vodafone to Cut Jobs in Spain as Recession Hurts Revenue
Vodafone Group Plc (VOD), the world’s second largest mobile-phone company, plans to reduce the workforce at its Spanish unit as unemployment exceeding 25 percent in the recession-plagued country causes sales to drop.
Executives will meet with representatives of labor unions early tomorrow to present a plan to cut jobs, a spokeswoman in Madrid for the unit, who declined to be identified citing company policy, said in a phone interview today.
Vodafone may cut as many as 1,000 jobs, or about 25 percent of its staff in Spain, according to a spokesman at the UGT union, who declined to be identified citing the labor group’s policy. Last year, the Newbury, England-based company cut variable salaries in Spain by 10 percent and reduced the number of working days by 15 days to boost savings, he said.
“The plan shows how Vodafone seeks to cut costs as the business continues to suffer from weakening consumption amid the macroeconomic crisis,” Andres Bolumburu, a Madrid-based analyst at Banco de Sabadell, said by phone today. “The job cuts should be positive for the stock, although I wouldn’t expect that to be a significant catalyst, as Spain is less and less important within the whole company.”
Vodafone fell as much as 0.4 percent to 164.5 pence and was trading at 164.6 pence at 10:39 a.m. in London. The stock has decline 6.4 percent in the past 12 months. Europa Press newswire reported yesterday on Vodafone’s job-cut plans in Spain.
Service revenue at Vodafone’s existing businesses in southern Europe slumped 9.8 percent to 4.98 billion pounds ($8.03 billion) in the six months through September, led by Spain, Portugal and Italy. Service revenue at the Spanish unit, which employs more than 4,000 people, dropped 11 percent in the period.
To contact the reporter on this story: Manuel Baigorri in Madrid at firstname.lastname@example.org
To contact the editor responsible for this story: Kenneth Wong at email@example.com