Vodacom Group, a leading telecoms and digital services provider in Africa, is laying off 113 employees in its South African subsidiary. The personnel downsizing is part of the group’s restructuring plans.
According to a report by TechCentral, Vodacom South Africa described the development as “unfortunate” having served notices to 400 employees under section 189 of the Labour Relations Act. This section of the legislation deals with retrenchments and establishes the process for fair dismissals based on operational requirements.
The company noted that it is part of the concerted effort to ensure that the company remains fit for purpose to support its strategic shift towards becoming a leading technology company.
“Vodacom South Africa has taken the difficult decision to restructure parts of our business, which unfortunately could impact about 113 of our valued employees across various levels including management and senior management,” the company noted.
Vodacom South Africa has a full-time employee headcount of about 4 145 people which excludes the likes of Vodacom Financial Services and some of its smaller subsidiaries. The job cut is believed to span the organization and is not focused on any particular department.
“While we deeply regret the impact that this has on colleagues, we are fully committed to supporting them through this transition. Vodacom South Africa remains focused on delivering exceptional value and relevant services to customers in a rapidly evolving telecoms and ‘beyond mobile’ environment, and we are confident that these changes, while difficult, help position the company for long-term sustainability.”
The development is the second time in the past 12 months that Vodacom has cut jobs. A year ago, Vodacom cut about 80 roles which it blamed on its shift from being a telecommunications operator to more of a technology company.
It also comes weeks after the Group was named Africa’s number-one employer for the year 2024. The honour was accorded to the Vodacom Group by the Top Employers Institute.
The Institute bestows the accolade to companies based on their performance in key HR domains such as people strategy, work environment, talent acquisition, learning, and well-being.
The year’s edition means the Vodacom Group has received the award for the second consecutive year. Following the feat, the prestigious certification and first place ranking have also been awarded to its subsidiaries in South Africa, Mozambique, Tanzania, and Safaricom Kenya.
Vodacom’s future plans
News of the planned retrenchments comes just a week after parent Vodacom Group told investors that it hoped to accelerate its revenue.
Last week, the Group said that it hoping to accelerate its earnings growth over the next five years – and is telling investors to expect an improved performance in the second half of this decade.
In a statement issued via the JSE’s stock exchange news service, the group noted that it is hosting an investor briefing session on Wednesday at which it will provide an update on Vision 2030, its strategy for the next five years.
“As part of this strategy, Vodacom will communicate an ambition to accelerate group EBITDA growth into double digits. This represents an upgrade from the existing medium-term target framework of high single-digit Ebitda growth,” the company said.
The group’s shares, trading 1 per cent higher last week, have added 28 per cent over the past year.
However, over a three-year horizon, the shares are still down 20 per cent. This is the result of an extended period of underperformance between April 2022 and April 2024, during which time the share lost more than half its value, declining from above R160/share to less than R80/share.
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