Vodafone's chief executive has provided firm assurances that there will be no compulsory job losses among high street retail staff as the telecommunications giant progresses with its monumental takeover of Three. This pledge comes despite the company facing a substantial target to achieve hundreds of millions in cost savings from the merger deal.
High Street Presence Deemed Crucial to Strategy
Margherita Della Valle, who spearheaded the colossal £16.5 billion acquisition shortly after assuming leadership in 2023, has emphasised the continued importance of physical stores to Vodafone's customer acquisition model. She stated that the company's presence on the high street remains a fundamental component of its business strategy.
"From a retail perspective and a property perspective, it's really important to say that our presence in the high street is really key to our business model... you will continue to see it very strongly," Della Valle affirmed.
"There will be some duplication but we've been very clear... there will not be any redundancies because we really see the high street as a key lever for us."
Substantial Synergy Targets and Integration Progress
Della Valle confirmed that the merger remains on track to generate up to £700 million in synergies, with the benefits anticipated to appear in the following year's financial results. She detailed that approximately half of these savings would stem from network and IT integration, with significant additional potential identified in procurement areas.
"50 per cent of that will be the network and IT integration and beyond that I would say strong potential for procurement... and then you have areas such as marketing costs, logistics costs that will also follow," the CEO explained.
Vodafone has reported making a rapid start with integration work following the merger agreement with Three, which received regulatory approval last year. The company noted that its spectrum and network sharing activation is progressing ahead of schedule.
Recent Performance Challenges in Key Markets
These assurances regarding employment come against a backdrop of challenging performance indicators for the telecommunications behemoth. Vodafone disclosed the loss of more than 70,000 UK mobile subscribers during the final quarter of the calendar year.
The FTSE 100 listed company reported that its UK mobile contract customer base specifically declined by 73,000 during this period. Vodafone attributed this reduction primarily to the disconnection of approximately 50,000 "very low-value business SIMs."
Meanwhile, in Germany – Vodafone's largest market – service revenue increased by 0.7 per cent to €2.7 billion (£2.3 billion). However, this growth figure fell short of analysts' consensus forecast, which had anticipated a 1 per cent increase according to Bloomberg data.
Financial Performance and Market Reaction
Despite these subscriber challenges in specific segments, Vodafone's overall group revenue demonstrated growth, increasing by 6.5 per cent for the quarter to reach €10.5 billion.
The company's shares experienced a decline of 5.1 per cent to 108p during Thursday morning trading. Nevertheless, this recent movement follows a period of significant growth, with the stock remaining up by more than 60 per cent over the preceding twelve months.
The telecommunications landscape continues to evolve rapidly, with Vodafone's merger with Three representing one of the most substantial consolidations in the UK market. The company's commitment to preserving high street retail roles while pursuing substantial operational efficiencies highlights the complex balancing act facing modern telecommunications providers as they navigate technological transformation and market consolidation.
