Vodafone job cuts won't impact Africa

Vodafone's plans to cut 11,000 jobs over three years will not impact Vodacom's operations in Africa.

Vodacom spokesperson Byron Kennedy told Connecting Africa that major shareholder Vodafone's role reductions announced on Tuesday morning will impact Europe only.

"Vodacom currently has no plans to reduce headcount – despite the inflationary pressures across the business," Kennedy said.

"The operating environment that we face requires an unwavering focus to deliver our strategy, to meet our business objectives and to serve our customers. We continue to ensure that we have the right measures in place – including our commercial initiatives and cost efficiency programmes – to help mitigate the impacts from the global macroeconomic risks," he added in an emailed response.

UK-headquartered Vodafone on Tuesday published its results for the year ended March 31, 2023, showing that group revenue increased by 0.3% to €45.7 billion (US$49.78 billion), driven by growth in Africa and higher equipment sales, offset by lower European service revenue and adverse exchange rate movements.

Vodafone said it had an "action plan," including a focus on simplicity, which would see "11,000 role reductions planned over three years, with both HQ and local markets simplification."

Vodafone owns 65.1% of South African-headquartered Vodacom.

African operations continue to grow

Vodacom operates across Africa in South Africa, the Democratic Republic of Congo (DRC), Lesotho, Mozambique and Tanzania, and it now also operates Vodafone Egypt.

Vodacom finalized its acquisition of Vodafone's 55% stake in Vodafone Egypt in December 2022, in a deal worth R43.6 billion ($2.3 billion).

Vodacom acquired Vodafone's 55% stake in Vodafone Egypt in December 2022. (Source: David Evers on Flickr CC 2.0)

Vodacom also owns a 35% shareholding in Safaricom, which operates in Kenya, and launched a new operation in Ethiopia in October 2022.

Vodacom Group now has 185.8 million customers across Africa, including Safaricom.

On Monday, Vodacom Group reported revenue growth of 16% year-on-year to R119.2 billion ($6.25 billion), positively impacted by the acquisition of Vodafone Egypt and rand depreciation against its basket of international currencies.

This was despite other challenges, including power supply issues in South Africa, startup costs of its new operation in Ethiopia, supply chain challenges, higher interest and inflation rates, and foreign exchange volatility.

In February 2023, Vodafone completed the sale of its 70% shareholding in Vodafone Ghana to Telecel Group.

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*Top image source: wirestock on Freepik.

— Paula Gilbert, Editor, Connecting Africa