Carphone Warehouse Group will cut 450 jobs at its call centres and head office as part of a strategic review, announced in January, to identify cost savings. The planned job cuts won’t affect the group’s store staff or its fixed-line and broadband Talk Talk service, but rather the group’s joint venture with Best Buy Co. Inc. (BBY).
The group is hoping to redeploy some of the staff to other parts of the business, calling their jobs ‘at risk’.
In November, the company announced it was targeting GBP50 million of operating free cash flow for its retail Best Buy joint venture and GBP100 million from its Talk Talk business by March 2010.
A spokesman for the company said the job cuts wouldn’t affect the rollout of large-format Best Buy stores across the U.K. and Europe, with 200 new stores planned by 2013.
Last year Carphone Warehouse put its 2,400 European and U.S. retail stores into the joint venture, in return for a cash payment of GBP1.1 billion from Best Buy.
“We are confident the announcement today will help us meet our ambitions and objectives for the next financial year,” a spokesman said.
Carphone Warehouse’s announcement comes two days after Vodafone Group PLC ( VOD) said it would cut 500 jobs in its U.K. business, as part of its own GBP1 billion cost reduction program.
Telecoms companies have held up better than other sectors in the current economic downturn but are still facing low, or no, growth in their mature markets.
And Carphone Warehouse’s retail business is subject to the same economic squeeze as other high street retailers.
The company said in January that it expects earnings next year to be flat.
“We’re confident of earnings being flat, partly on the basis of our strong telco business which is more predictable than retail,” Chief Financial Officer Roger Taylor said in an interview in January.
Meanwhile, the Communication Workers Union has reacted with anger at further shock attacks on jobs in the telecoms sector.
Andy Kerr, CWU deputy general secretary, said: “This is a shock announcement for Carphone Warehouse staff who had no consultation or prior knowledge of these job cuts.
“CWU has an active campaign for recognition at Carphone Warehouse and we now hope that the company will consult the union on implementation of the job losses to minimise the impact on workers.
“We will do all we can to support our members in response to attacks on jobs in Carphone Warehouse.”