Vodafone sounds out 2000 on redundancy

Vodafone has asked more than 2000 of its New Zealand staff whether they would be interested in taking voluntary redundancy as it bets on a radical restructure making the company more attractive to sharemarket investors.

Spokeswoman Kathy Gieck said the only staff who had not been asked to express interest in voluntary redundancy were about 600 employees in frontline roles in its call centres and retail stores who deal directly with customers.

They had been excluded to avoid disruption to customers, she said.

Gieck explained Vodafone would not be obliged to offer voluntary redundancy to everyone who put their hand up for it.

‘‘At that stage it becomes a conversation. There will be some key talent to whom we would say ‘hey, we would love you to stay’.’’

But by the same token, Vodafone did not expect the number of volunteers would be sufficient to avoid compulsory redundancies, she said.

‘‘Without question there are going to be [compulsory] redundancies. We are not going to get where we need to get to through just through a voluntary redundancy process.’’

Vodafone NZ currently employs about 2700 staff. An industry source suggested in December that Vodafone wanted to cut that number by 400, but another now believed the cuts could go deeper.

Chief executive Jason Paris has said he wants to give staff certainty about where they stand by the end of the month.

The restructure is being designed to make Vodafone NZ more attractive to investors ahead of a second attempt by the Vodafone Group to partially float the subsidiary on the NZX next year.

The company’s hope is that it can outsource more of the work currently performed by Vodafone in New Zealand to ‘‘centres of excellence’’ that the British-based Vodafone Group has established in other countries.

Paris signalled in January that would likely to see job reductions at its call centres in Auckland, Wellington and Christchurch.

Unite Union organiser Shirley Wang said she expected the closure of a contact centre in Manukau, Auckland where Vodafone employs about 120 people. Some of those workers could be offered roles at its offices in central Auckland.

Gieck confirmed Vodafone had signalled back in 2016 that the Manukau facility would close at some point.

Paris said last month that Vodafone did not have a predetermined view on how it would be using any of the 26 overseas centres, which employed up to 20,000 staff – ‘‘but we are going to be weighing all the options’’.

An industry source questioned how investors in Vodafone NZ’s planned float might view the economies that could result.

Vodafone valued Vodafone NZ at $3.4 billion on paper in 2016 when it planned to merge the business with Sky Television in a deal that would have seen 49 per cent of the shares in the combined business listed on the NZX.

But a source said an arrangement whereby Vodafone retained effective control of its New Zealand business while still providing a large number of feepaying services to the local firm carried some risk for investors.

One was that the local business could become a hostage to those fees which could increase over time, he said.

For example, the New Zealand listed business would likely need to pay fees to Vodafone to continue to use the Vodafone brand, he noted.

When Vodafone was hoping to merge Vodafone NZ with Sky, it envisaged the merged firm would pay Vodafone $31m a year for at least 10 years for the right to use the Vodafone brand and – at least initially – an additional estimated $56m a year for other services provided by the group business.

Wang said Vodafone NZ was ‘‘already understaffed’’ and employees were stressed by the possibly that redundancies would increase their workload.

Many of its call centre staff were solo parents who had not had a pay rise last year, she said.

‘‘I had a member who had a panic attack on the floor last Friday because she wasn’t sure what the future would be for her and her children. She can’t take redundancy but she was also not sure what her job would be.’’

‘‘I had a member who had a panic attack on the floor last Friday because she wasn’t sure what the future would be for her and her children.’’

Unite Union organiser Shirley Wang