Vodafone/Three insist they will create jobs but union warns of losses

Vodafone and Three believe their proposed merger in the UK could create as many as 12,000 jobs, but one of the country’s biggest trade unions heartily disagrees.

Representatives from both telcos and Unite the Union were among those present at a Business and Trade select committee hearing this week designed to examine the implications for competition in the UK telecoms market should the tie-up go ahead. The telcos were naturally bullish on the benefits of the deal, but the union naturally has concerns, including that staff could be adversely affected.

“We would expect there to be job cuts in the region of 1,000 to 1,600,” should the merger go ahead, said George Stevenson, Unite’s Bargaining and Investigative Researcher. His numbers come from the union’s research into similar mergers in the UK and on the other side of the Atlantic.

“Vodafone is not exactly shy about cutting jobs,” Stevenson said, referring of course to the telco group’s announcement earlier this year that it will shed 11,000 positions globally. He also intimated that Three UK parent company CK Hutchison has a less than stellar record when it comes to job cuts. The proposed merger is “a very worrying sign for workers in these sectors,” he said.

Stevenson’s comments came after executives from Vodafone and Three painted a very different picture of what their merger would mean for the UK, including their £11 billion pledge to improve network coverage, and warned that one or both of them could ultimately fail should they not be permitted to join forces. “We are challenged every day by the costs of running a network in the UK,” said Nicki Lyons, Corporate Affairs and Sustainability Director at Vodafone UK.

But while we have heard them talk up that projected investment figure many times, when it comes to the workforce question, they are still trying to highlight the positives without sharing a concrete figure on staffing levels.

“We’re not in a position to give numbers at this stage. We haven’t worked through the level of detail,” Lyons said.

However, “while there is some duplication with head office jobs, the actual number of employees that we will need to create the new infrastructure that we’re investing in will be significant,” she said. “We believe that actually jobs will be created as a consequence of this merger,” in areas such as network building, IT systems, network maintenance and so forth.

Andrea Donà, Vodafone UK’s Network and Development Director, explained that the decommissioning of duplicate sites, the upgrade of retained sites, and broader network rollout could have a bigger impact on headcount than we might have guessed.

“We believe it can create up to 12,000 jobs,” he suggested. Vodafone has 18,000 sites at present and will extend its network – in conjunction with Three – to 26,000. “That needs a lot of labour,” he said.

Should that job creation figure prove even close to accurate, the merged entity’s biggest concern might well be sourcing the labour for its network.

“While there are always risks when two companies decide to merge, the development of connectivity implied by Vodafone and Three’s pledge to build a 5G network for Britain is likely to create exciting new roles requiring new combinations of IT, software engineering and telecoms skills,” said Nick Johnson, Head of the UK Telecoms Innovation Network (UKTIN). “The challenge that Vodafone and Three will need to overcome is access to talent and skills, because when innovating, people are your life blood.”

Johnson urged the telcos to collaborate with the government to raise awareness of the range of network engineer jobs available to those keen to join the sector or to upskill.

And there could be plenty of the latter, given how many existing telecoms workers have found their jobs to be under threat in recent months.

“The current trend for telecoms operators is job losses, not gains…Job losses have been announced across the sector,” Stephen Lerner, General Counsel and Regulatory Affairs Director at Three, told the select committee, funnily enough without namechecking Vodafone. Or indeed, to be completely fair, BT’s cull of a massive 55,000 global positions, or Virgin Media O2’s much smaller, but still significant, headcount reduction plan.

Lerner was keen to make the point that absent the merger, the employment picture looks even gloomier for UK telecoms workers. The long-term outlook at Three is not good “because we’re subscale and we can’t invest,” he said.

He may or may not be right on the jobs issue. We can be sure of one thing though. We we will hear much more of the ‘woe is me’ message from Vodafone and Three as this merger attempt plays out.

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