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Vodafone Group Plc (NASDAQ:VOD) (LON:VOD) will reduce its workforce in Germany by eliminating 500 jobs as the company tries to modify its operations amid strong competition and lower fees in the country.
The report regarding the group’s plan to cut 500 jobs in Germany was reported by Frankfurter Allgemeine Zeitung and Rheinische Post. The spokesperson of Vodafone Group Plc (NASDAQ:VOD) (LON:VOD) confirmed the reports and stated, “We have started a two-year program.”
According to Reuters, the group’s objective is to transfers some of its operations in India and Romania. Vodafone also aims to reduce the starting salary of its workers considerably. Employees working in the customer service and network technology division of the group will be affected by the workforce reduction.
Vodafone’s operations is negatively affected by low price offerings of its competitors particularly from T-Mobile, the subsidiary company of Deutsche Telekom AG (FRA:DTE) (PINK:DTEGY) (ETR:DTE). The group is also suffering from a regulation that requires mobile operators to charge lower fees from incoming calls from other networks.
Last January, Vodafone Group Plc (NASDAQ:VOD) (LON:VOD) also announced to reduce its workforce in Spain by 25 percent or 1,000 jobs as part of its cost cutting measures. A year earlier, the company also reduced its variable salaries in Spain by 10 percent as well as the number of working days by 15 days.
Last month, it had been reported that Verizon Communications Inc. (NYSE:VZ) discussed its relationship with Vodafone either to end its wireless joint venture or to merge with its European partner. The U.S. wireless carrier is interested to takeover Vodafone. Vodafone’s CEO Vittorio Colao previously stated that he is not sure whether the group’s relationship with Verizon will change or not. He said Vodafone is “willing to keep an open mind on everything.”
Vodafone also announced its partnership with China Mobile Ltd. (NYSE:CHL) (HKG:0941) to bid against 20 other telecommunications companies to obtain a mobile network license in Myanmar. The two companies have a long history of strategic partnership since 2000. Vodafone was a shareholder in China Mobile until 2010.
The group believes that Myanmar is a significant new market for the global mobile industry citing its young population of around 60 million and its GDP growth rate of 5.5 percent annually. The country’s mobile penetration is currently below 10 percent.