Vodafone Australia 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 outlining the company's revised business plan for 2001, prepared on November 2, Vodafone Australia's chief operating officer, Grahame Maher, 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 operating expenditure and 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 2219 permanent staff. In recent months it has announced 350 redundancies nationally, mostly in customer care.
The document said that to develop efficiencies, the company will have to re-engineer business processes, sell or outsource several other projects, and partner for non-core activities.
The outsourcing of the IT and engineering division is included on the agenda. The operational saving from this move is expected to be about $8 million.
Vodafone dealers are also expected to be affected, with up to 400 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.
The sale of Vodafone's warehouse and the outsourcing of handset delivery is also expected. The warehouse was bought 12 months ago, and the reason for the change appears to be driven by the telco's recent introduction of no-plan offers.
The Globalstar satellite service will also 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 Pulling out of the service is expected to save Vodafone about $4 million per annum. The document details the first quarter of 2002 as the deadline for the sale.