Citing “financial challenges,” Vodafone Qatar has laid off 50 employees and is trimming allowances for its remaining staff.
The changes were announced in a memo to employees from the company’s new CEO Ian Gray on Sunday.
Gray – who has only been in his post for five months – also said in the memo that people who had poor performance ratings in the past two years were also being sacked this week, “to minimise the disturbance in the market.”
Vodafone Qatar has failed to turn a quarterly profit since it broke Ooredoo‘s monopoly in 2009.
In a statement to Doha News, Vodafone confirmed the layoffs, saying that the decision to lay off staff has been “difficult.”
“We can confirm that like many other companies in Qatar, we have re-examined our organizational structure and cost base to ensure we have the right resources in the right place to drive the business.
As a result, we have taken the difficult decision to reduce our work force by approximately 50 people. “
All laid-off staff will stop working at Vodafone Qatar from today (May 4) to allow them time to find another job during their notice period, the memo said.
Salary cut
In his message to staff, Gray also laid out plans to cut generous allowances paid to staff who joined the company at or around its launch in 2009.
In the memo, he said that these allowances will now be “standardized” – lowered – so that all employees will receive the same benefits.
He added that the company’s “legacy retention scheme,” an incentive system under which staff were paid an extra two months’ salary for each year worked, is also being axed.
A Vodafone employee who spoke to Doha News on condition of anonymity said that the cuts will have a significant effect on take-home pay:
“We will take home up to 20 percent less,” the person said. “But we are told we have no choice but to sign (the new agreement), otherwise we’ll be sacked or put on the next redundancy list.”
Financial performance
News of the layoffs comes as Gray attempts to improve the financial performance of Vodafone Qatar.
His predecessor Kyle Whitehill predicted that the company would break even by 2015 when he joined Vodafone Qatar in mid-2013.
Instead, the company’s market share remained stagnant and its losses widened during the first nine months of last year, as the company pumped more money into network upgrades.
Not long before he left, Whitehill – who is now the London-based CEO of Ezdan International, according to his LinkedIn profile – told Bloomberg that he did not expect Vodafone to turn a profit until 2017 at the earliest.
He blamed this on the slowing population growth as well as pressure to keep prices low to compete with incumbent Ooredoo.
For its part, Ooredoo Group said two months ago that it was laying off 100 Qatar-based staffers as growth sputtered.
Vodafone lost QR286 million in the nine-month period that ended Dec. 31 and is scheduled to release its full financial results for its fiscal 2015 year on May 17.
Thoughts?
