South Africa’s leading mobile network operator in terms of subscriber base, Vodacom, plans to cut 80 jobs as part of its cost reduction strategy.
These job cuts will affect all levels of the company’s operations, impacting its current workforce of 5,400 employees, Bloomberg reports.
Following the announcement of the layoffs, Vodacom’s stock price has declined by 2%.
A spokesperson for Vodacom stated, “We regularly assess the suitability of our business operations as we transition from a telecommunications company to a prominent technology firm.” Additionally, Vodacom South Africa is actively implementing various measures to reduce costs, ensure sustainable operations, and maintain financial resilience.
According to Vodacom’s latest financial report released in September 2023, the company experienced a 35% increase in revenue and a 32% increase in operating income. However, its profit margin and cash reserves decreased by 20% and 57%, respectively. Vodacom attributed this decline to investments in alternative power sources due to load-shedding challenges.
The company’s upcoming financial results for the fiscal year ending March 31, 2024, are expected to be disclosed in May.
Amidst the job cuts, Vodacom faces additional challenges. It is currently embroiled in a legal dispute with a former employee over compensation for inventing the “Please Call Me” service.
As per a court ruling, the ex-employee may be entitled to a percentage of revenue from the service, potentially amounting to R63 billion. This sum represents approximately 10% of Vodacom’s market capitalization.
