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Vodafone Group, the world's largest mobile-phone company, plans to cut hundreds of jobs in the UK to reduce costs and protect earnings amid the economic slowdown, two people with direct knowledge of the plan said.
The company aims to announce the measures today said the people, who declined to be identified because the plans are confidential.
The jobs will be eliminated at Vodafone's UK operations, the people said, declining to give a precise number.
Vodafone Chief Executive Officer Vittorio Colao, the 47-year-old former McKinsey partner who took over in July, is pushing managers to eke out more profit from existing operations.
This month, he agreed to merge the Australian unit with Hutchison Telecommunications's operation in the country, where growth prospects are slim.
On February 3, Colao said Vodafone was making progress on its plan to reduce costs by 1 billion ($2.8 billion) by March 2011 to protect earnings.
The measures will have "some impact on headcount," he said at the time, declining to say how many jobs may be affected.
The cuts would include "network rationalization" and lower spending in areas such as logistics and advertising, he said.
Simon Gordon, a Vodafone spokesman, declined to comment.
Vodafone on November 11 cut its full-year sales forecast for the second time in four months, while keeping its profit forecast, raising the full-year free cash flow prediction and increasing the dividend payment.
Vodafone's UK unit had a margin on earnings before interest, taxes, depreciation and amortization of 23.2 per cent in the six months ended September 30.
In Germany, Vodafone's biggest market, the margin was 44 per cent and in Italy 44.9 per cent.
- BLOOMBERG
