Those 66,000 Job Cuts Reinforce UK Telco Desperation
BT has followed Vodafone in detailing big headcount reductions. For investors, future efficiency gains don’t counter the many reasons to sell the shares.
A sign above the entrance to a Vodafone store in Madrid, Spain.
Photographer: Paul Hanna/BloombergTwo of the biggest names in UK telecoms unveil plans for as many as 66,000 job cuts with huge scope to reduce business costs — and yet their shares sink. Technological progress may bring consumers super-fast broadband for watching TikTok videos with less buffering. But the jury is clearly out on both the implications for industry jobs and the likely investment returns for shareholders.
Vodafone Group Plc’s planned 11,000 job reductions over three years were the eye-catching piece of a strategic update by new Chief Executive Officer Margherita Della Valle. Analysts have long argued the UK mobile operator could be more efficient, so action was needed. But that wasn’t enough to distract from weak operational results and a stretched financial position as Vodafone works on delivering speedier fifth-generation networking, known as 5G, to its customers.