Vodafone Germany cuts 500 jobs, outsources to India

vodafone JobsVodafone Germany will eliminate 500 jobs by 2015 and re-asisgn the position to India and Romania, where it can hire cheaper labor. German-language newspapers RP Online and Frankfurter Allgemeine both reported the plans to cut jobs Tuesday, after obtaining copies of an internal letter written by Vodafone Germany CEO Jens Schulte-Bockum.

In the letter, Schulte-Bockum said the company could not afford high salaries in such a tough operating environment.

“We are currently paying starting salaries that are significantly above the market rate,” Schulte-Bockum said in his letter. He added the affected jobs will be in the network technology, IT and customer service business units.

A Vodafone spokesperson confirmed to Reuters Monday the outsourcing would be completed by 2015.

However, Bloomberg reported Tuesday the number of jobs was not disclosed in the letter. “Commercial pressure is increasing”, and regulation of the industry “has been hostile to investment for years”, it quoted Schulte-Bockum’s letter.

The German office’s decision to move jobs to India and Romania is the opposite of its Australian counterparts. In March, Vodafone Australia CEO Bill Morrow said it plans to hire 750 people in its Tasmanian call center and shift away from using its Indian one, and this is the first step in rebuilding the company’s brand.

The company will continue to maintain the Indian operation, but it will be “more of back office-type activity”, Morrow added.

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