Vodacom to cut staff in South Africa

Vodacom South Africa is set to retrench a small number of employees as it prepares the company for a changing operating environment.

On Wednesday, 26 February 2025, Vodacom announced that it had made the difficult decision to restructure parts of its business.

This restructuring could impact around 113 Vodacom South Africa employees across various levels, including management and senior management.

“This step is part of our concerted effort to ensure that the company remains fit for purpose to support our strategic shift toward becoming a leading technology company,” Vodacom said.

“While we deeply regret the impact that this has on colleagues, we are fully committed to supporting them through this transition.”

Vodacom South Africa said it remains focused on delivering exceptional value and relevant services to customers.

However, this must be achieved in a rapidly evolving telecommunications and ‘beyond mobile’ environment.

“We are confident that these changes, while difficult, help position the company for long-term sustainability,” Vodacom said.

The retrenchments at Vodacom South Africa followed much bigger staff cuts at other local telecommunications companies.

Telkom, South Africa’s biggest telecommunications employer since 1994, has cut 51,360 jobs over the last 25 years.

Telkom’s annual results for the year ended 31 March 2024 showed that Telkom has 9,877 employees, down 15% from 11,624 a year earlier.

The staff cuts over the last year formed part of a restructuring process in February 2023 to reduce costs.

Over the last four years, Cell C has slashed its workforce from around 2,600 employees to under 1,000.

These retrenchments were necessary to cut Cell C’s costs and make the telecommunications company more sustainable.

Vodacom’s Vision 2030 targets

Vodacom’s staff cuts align with its five-year Vision 2030 strategy, focusing on return on capital and EBITDA growth targets.

Vodacom is one of the world’s largest communications companies by revenue and serves 206 million customers across Africa.

Although it has its roots in South Africa, it has expanded into numerous countries, including DRC, Egypt, Ethiopia, Kenya, Lesotho, Mozambique, and Tanzania.

Vodacom, which is majority-owned by Vodafone, covers a population of 570 million people through its mobile networks on the continent.

On 19 February 2025, Vodacom hosted an investor briefing session to discuss its upgraded growth ambitions for the next five years.

It used the session to communicate the Vodacom Group’s strategy for the next five years, called Vision 2030.

One of the strategy’s standout components is the ambition to grow earnings before interest, taxes, depreciation, and amortisation (EBITDA) by double digits from 2025 to 2030.

This represents an upgrade from the existing medium-term target framework of high single-digit EBITDA growth.

To achieve its planned financial performance, it is working to ensure a return on capital employed (ROCE) of 23.1%.

Another ambitious target is to achieve 75% smartphone penetration by 2030 from its current level of 63%.

Increased smartphone penetration is important as it allows Vodacom to offer a wider range of services to these clients.

Apart from higher data consumption, smartphone users also use more digital and financial services.

These are important new revenue streams for Vodacom, and the increased smartphone penetration will help it to drive this growth.

Vodacom has set an ambitious target to increase its total customer base by 50 million by 2030. It is also targeting 120 million financial services customers in this period.

All these targets should result in Vodacom increasing revenue to over R200 billion by 2030, cementing its position as a top global telecommunications company.