I find it almost humorous that the business and trade press so often equate corporate cost reduction with nothing more than layoffs or, as the Brits like to say, redundancies. Consider the case of Vodafone, which The Guardian reported just announced “a 2.4% increase in half-year operating profits — to £5.9bn — as a result of its existing cost-saving plan and a strong performance from its American joint venture Verizon Wireless”. Moreover, “Vodafone is ramping up its cost-cutting programme, looking to save a further £1bn over the next two years, as the world’s largest mobile phone operator battles with the global economic slowdown.” Perusing the many articles on the subject on Google News this morning, none that I could find mentioned that Vodafone is driving a significant percentage of this cost reduction through procurement and supply chain initiatives vs. simply slashing heads.
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- Vodafone doubles cost cuts to £2bn (telegraph.co.uk)
- Vodafone steps up cost-cutting in Europe as emerging markets profits rise (guardian.co.uk)