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Vodafone Spain says adios to own high street stores – reports

Vodafone's Spanish unit reportedly intends to close all 34 stores as part of its plan to lay off more employees.

Anne Morris, Contributing Editor, Light Reading

September 30, 2021

3 Min Read

Vodafone Spain says adios to own high street stores – reports

Life is certainly not getting much easier for employees of Vodafone's operating company in Spain.The Spanish company has already eliminated nearly 900 jobs from its payroll in the last two years, according to the annual report issued by Vodafone Group. Earlier this month, it announced plans to cut a further 515 staff members.According to several reports, that number has now been trimmed down to 509 and will be partly achieved by closing all 34 Vodafone-branded retail outlets in Spain.El Mundo said 237 jobs will be affected by the store closures. A labor union source told Reuters that the stores will be closed down by March 2022, leaving customers with access only to franchise partners.The move ties with previous comments from Vodafone, which had said it is mainly targeting roles in commercial areas. This suggested the layoffs would affect people who work in sales, marketing and customer services – but not those on the technical side.Furthermore, a growing number of customers buy phones and telecom services online rather than in physical stores – a trend that has only gained traction during the coronavirus pandemic.This does represent an opportunity for operators to close stores and cut jobs without damaging sales. About 26% of sales were carried out online across Germany, Italy, Spain and the UK, Vodafone said in its last annual report.El Mundo said there are six Vodafone stores in Madrid, four in Barcelona, two in Seville and two in Valencia. In total, the Spanish news site said Vodafone has 600 stores in Spain through franchises and distributors.The job cuts and store closures form part of Vodafone Spain's latest labor force adjustment plan.Tough competitionDespite the slight trimming down to 509, the Vodafone Spain will still have ditched more than a quarter of its entire workforce since 2019. Vodafone has pointed to commercial pressures, with competition forcing down prices, customers flocking to low-cost deals, and profitability suffering.It is certainly true that revenues and profitability have plummeted in the last few years. In the financial year to March 31, 2018, Vodafone made nearly €5 billion (US$5.9 billion) in Spanish sales and more than €1.4 billion ($1.7 billion) in adjusted earnings (before interest, tax, depreciation and amortization).Just two years later, sales had dropped to less than €4.3 billion ($5.1 billion) and earnings were down to a bit more than €1 billion ($1.2 billion). Its basic profit margin shrank from 28.5% to 23.5% over this period.Want to know more about 5G? Check out our dedicated 5G content channel here on Light Reading.More recently, the performance has been considerably better. Revenues dipped only 3% in the last fiscal year to March 31, 2021, to about €4.2 billion ($4.9 billion), and core earnings rose slightly, to €1.04 billion ($1.22 billion).That meant the company's profit margin improved to about 25%. For the recent first quarter from April to June 2021, sales were up nearly 4%, to €1.03 billion ($1.21 billion).Vodafone is also far from the only operator to be suffering some pain in Spain. Orange recently reported that Spain remained a drain on group finances, although second-quarter revenue fell by a lower rate of 2.7% compared to the 7.4% decline in the first quarter.Orange said it would address the problems in this market by repositioning its offers. For example, Orange Spain has simplified its processes and brands, removing the Republica Movil brand and focusing on Simyo and Amena for low-cost products.Related posts:Vodafone Spain to axe hundreds more jobsVodafone seeks another €1B in cuts as it maintains dividendOrange hails stronger Q2 amid fiber splurge— Anne Morris, contributing editor, special to Light Reading

About the Author(s)

Anne Morris

Contributing Editor, Light Reading

Anne Morris is a freelance journalist, editor and translator. She has been working in the telecommunications sector since 1996, when she joined the London-based team of Communications Week International as copy editor. Over the years she held the editor position at Total Telecom Online and Total Tele-com Magazine, eventually leaving to go freelance in 2010. Now living in France, she writes for a number of titles and also provides research work for analyst companies.

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Vodafone Spain says adios to own high street stores – reports

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