3 begins store cost cutting drive

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3 is to embark upon a major cost cutting exercise across its 300-strong UK retail estate this week. In an email to staff, 3 said it will look to avoid axing employees by cutting back elsewhere in its retail operation.

3 is looking to adjust store opening hours and staff working hours according to peak/quiet periods. It is also examining its present staff bonus structure, as well as the viability of certain staff positions. There is also a recruitment freeze in place until further notice.

3 head of retail Ian Parpworth conducted a conference call with all 300 retail outlets in the UK yesterday to outline new cost-cutting initiatives, as well as request advice from staff on further ways to reduce outgoings.

3 has already been in consultation with a number of ‘3 exchange’ store representatives around the UK about ways to stem expenditure in store.

3 said it was looking to “stabilise” after two years’ retail growth, following the appointment of Kevin Russell as UK chief. 3 has 290 of its own sites and 10 concessions within Superdrug stores. Around half the new sites were added in 2008.

“Our retail operation is a young business. It has gone through a period of very rapid growth – the fastest retail roll out in the industry,” said a spokesman.

“Now we’re established on the high street. We’re focused on developing a great retail business that really meets the needs of our customers.”

3 has made 14 positions redundant within marketing and operations at its Maidenhead headquarters in the past six months. Its retail headcount has grown significantly in the meantime.

Also, 3’s UK roaming agreement with O2 will come to an end on September 1 under the terms of its parallel deal with Orange.

O2 has historically provided 3 with network coverage in areas unsupported by 3’s 3G network. However its agreement with Orange, signed in 2006, precludes the O2 contract running beyond September.

3 is also to sever ties with its other 3 operating countries by ending its  ‘3 Like Home’ deal in July. The move comes as the European Commission moves to cap roaming data and SMS wholesale rates on July 1.

3 Like Home affords customers  free incoming calls and messages when roaming on 3 in Italy, Sweden, Austria, Denmark, Australia, Hong Kong and Indonesia.

In light of the impending cuts, staff accused 3 of “wasting” money on a major training exercise in Camden, London, last month; some staff were flown into London, and many were put up in hotels. “If the company has money problems, then why splash out on getting staff to London for something it could have done in store. It is just crazy.”

 

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