Vodafone to slash Australian staff and outsource IT

Vodafone Pacific Pty. Ltd. is preparing to slash its workforce by half, outsource its IT and engineering departments, and sell off several projects as part of a drastic “turnaround” rescue plan.

In a draft document obtained by Computerworld outlining the company’s revised business plan for 2001, prepared on Nov. 2, chief operating officer Grahame Maher for Vodafone in Australia said the business is “now extremely inefficient.”

“To give an indication of the size of this problem, the costs of our business have to reduce in both OpEx (operating expenditure) and CapEx (capital expenditure) by at least 50 per cent. In comparison to other businesses of the same or similar size, we would appear to need to reduce staff levels by 50 per cent, as well,” the document said.

As at September 2001 Vodafone had 2,219 permanent staff. In recent months it has announced 350 redundancies nationally, mostly in customer care.

The document said key to the business developing efficiencies would be a re-engineering of business processes along with the sell-off and outsourcing of several projects, and partnering of non-core activities.

Included on the agenda is the outsourcing of the IT and engineering division. An operational saving from the outsourcing of IT is expected to be about A$8 million (US$4.12 million).

Vodafone dealers are to be affected, with up to 400 dealers set to go and the likely sale or licensing of all Vodafone franchise stores. It appears Vodafone is looking to change its distribution strategy from specialist stores to a more broad-based channel, such as Coles Myer.

Sale of Vodafone’s warehouse and outsourcing of handset delivery is also on the agenda. The warehouse was bought 6-12 months ago. The reason for the change appears to be driven by the telco’s recent introduction of no-plan offers.

The Globalstar satellite service is to be affected, according to the document. Vodafone’s Globalstar integrated satellite/digital service covers 100 per cent of Australia’s mainland and up to 200 nautical miles from the mainland Getting out of the service is expected to save the business about A$4 million per annum. The document details the first quarter of 2002 as the deadline of the sale.