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Vodafone cuts 500 UK jobs

The operator is shedding hundreds of employees as part of a cost-cutting drive to help it 'compete more effectively in the UK market'

Vodafone UK has announced it is cutting approximately 500 jobs as part of a cost-saving drive.

The operator, which currently employs 10,500 staff in the UK, told those affected of their redundancy on Tuesday. In a statement, Vodafone said it "intends to reduce its cost base, whilst continuing to invest in new products and services to meet changing customer needs", adding that the cuts are necessary in order "for it to compete more effectively in the UK market".

A spokesperson for Vodafone told ZDNet UK on Tuesday morning that 170 of the jobs cuts will take place at the mobile operator's Newbury headquarters. The rest of the redundancies will take place "across all levels and across the country".

Vodafone said in November that it intended to cut costs by £1bn.

According to the statement issued on Tuesday, new roles are also being created in the field of "total communications services", and the firm's retail shops and online services will see further investment.

In a statement, the communications workers' union Connect said it would be urging Vodafone to explore retraining and redeployment options, and called for any "unavoidable" redundancies to be voluntary.

"We will be working very closely with the company to ensure that our members are treated with respect during this difficult time and that a full and proper process of consultation is carried out," said Steve Thomas, Connect's national officer for Vodafone, in the statement.

Raymond Yu, an Ovum analyst, said the redundancies were expected and do not reflect on Vodafone's position relative to its rival operators.

"In the current climate, it's just normal that they're looking to be more aggressive with their cost management, and cutting jobs is just one way of doing that," Yu told ZDNet UK on Tuesday. "All of the operators are in the same position."

Yu explained that, due to the financial downturn, customers are "more worried about expenditure than having the latest handset". "They're not really looking to commit to longer contracts, and are possibly looking at SIM-only contracts as well," he said. "Everyone's been lowering their prices to take this into account, Vodafone included."