Vodafone doubles savings target to £2bn

11 November 2009

11 November 2009 | Jake Kanter

Telecoms firm Vodafone wants improved procurement to contribute to an extra £1 billion of cost savings by 2012.

The company expects to reach its previously announced £1 billion savings target by March, a year ahead of schedule, so has announced plans to cut costs by a further £1 billion by 2012.

The company's CEO, Vittorio Colao, said savings have been driven through IT outsourcing and cutting overheads.

Procurement savings will be achieved by channelling more spend through the "Vodafone procurement company", a centralised purchasing team based in Luxembourg. Colao added the centre is already delivering results after its launch last year.

The company also plans further IT outsourcing, cutting property and facility costs, as well as reductions in overheads to contribute to the savings target. Efficiencies will offset increases in inflation, and around £500 million will be used to help the company grow.

Vodafone announced the plans in its results for the six months to the end of September, which saw revenue increase by 9.3 per cent compared with the same period last year to £21.8 billion.

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