Vodafone confirms strategic review under way

6 Dec 2006

UPDATE: An increasingly competitive mobile telecoms market is being cited as a factor behind a review of Vodafone’s Irish operations that reports suggest may lead to possibly 500 job losses. However, a representative of the company denied to siliconrepublic.com that any such figure has even been determined.

A spokesperson said that reports of 500 job losses at the company were “drawing conclusions that the company had not yet even reached”.

“There is an organisational review under way,” she confirmed. “The purpose of it is to look at 2007 and figure out the new things the company should be and ensure that the structure and capabilities are in place. It is also to ensure that the right talent is in place to exploit new opportunities.

“It is too early to comment on job figures. There is a review under way but it is certainly not appropriate at this time to talk about job figures.”

A statement issued by the company this morning said: “Reports in today’s media suggesting that Vodafone Ireland is likely to announce staff cuts of up to 500 in January 2007 are entirely speculative. Vodafone Ireland is in the process of a review to ensure that the company maintains the right organisational structure needed to meet the increasing competitive challenge and exciting new opportunities ahead.

“This process has only recently commenced and Vodafone is therefore unable to confirm at this early stage how many staff will be affected by the review,” the statement read.

Vodafone is Ireland’s largest mobile operator with over 2.1 million subscribers. However, the days of massive ARPU (average revenue per user) growth appear to be over and mobile operators are faced with the task of deriving new revenue streams from a saturated customer base.

Mobile operators are also under pressure to derive a return on investment from massive investment in 3G. Earlier this year outgoing Vodafone Ireland CEO Theresa Elder told siliconrepublic.com that Vodafone’s total investment in its Irish infrastructure was €1bn over seven years and the company is currently halfway through that investment cycle.

According to figures released by the company a month ago, ARPU was €46.90, down from €53.10 for the same period a year ago.

Vodafone employs over 1,800 people in Dublin, Dundalk and across its nationwide retail outlets. The lion’s share – 1,500 people – are based at the company’s Mountain View, Leopardstown, operation.

It is understood that Vodafone’s Irish staff will be updated on the review’s findings at the end of January.

The news comes a day after document management firm Xerox revealed that it too is conducting a review of its Blanchardstown operations where 1,260 people are employed.

By John Kennedy