Everything Everywhere defends ‘top-heavy’ structure

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Rumour of unrest at Everything Everywhere around structure of its expansive senior management team is vehemently denied

The UK joint venture between France Telecom and Deutsche Telekom, Everything Everywhere, has vigorously defended the size of its senior management team against rumour of unrest within its two shareholder businesses that the new firm is top-heavy and unwieldy compared with rivals.

Talk last week emerged also of unrest among lower-level managers that good staff are under threat from new redundancy programmes to slash operational costs from the business, whilst its senior management team is numerous.

Everything Everywhere poin­ted out that the composition of its senior management team, which is more than twice the size of equivalent structures in O2 and Vodafone in the UK, was agreed back in July by a supervisory board of directors consisting of personnel from Everything Everywhere, France Telecom and Deutsche Telekom.

It also said the structure was justified on account of the scale of the integration of two UK network operations and the job to manage 27.9 million customers on the Orange and T-Mobile networks.

A spokesperson said: “It is very clear why others have fewer senior staff; they are better-established businesses and their sole focus is market trading and performance. They haven’t met any significant challenges with regards business operation for some time. It’s quite unfair to compare Everything Everywhere to O2 and Vodafone because it is a company in an entirely different stage of creation.

“When you combine two companies you can’t just drop a load of staff. It requires a significantly large management board to steer the business through its first stages of existence. Others are simply not in the same stage.

“Putting two companies together is such a difficult task. Only 30 per cent of mergers actually work, and our structure and process is to ensure we are at the top of that 30 per cent band. There is a huge focus on that – on making sure the businesses and cultures fit, and operate as a single entity. It requires extra staff, and senior staff, to see that through.”

Everything Everywhere, which set economies of scale as an essential motivation for the combination of Orange and T-Mobile in the competitive UK market, employs 16,500 staff at present, with around 1,200 middle-management and duplicate roles to be made redundant in January.

Of its total headcount, around 6,000 staff work in its 720 retail stores. More than 10,000 are in non-customer facing roles.

O2 and Vodafone, which trail Everything Everywhere by around 23 per cent and 32 per cent for customer numbers, employ around 21 per cent and, significantly, 51 per cent fewer staff, respectively.

But Everything Everywhere’s top management team comprises at least 22 vice presidents, working under four chiefs. Nine report directly to chief executive Tom Alexander.

The remaining 15 vice presidents report to either chief financial officer Richard Moat, chief development officer Gerry McQuade or chief commercial officer Andrew Ralston, all of whom report to Alexander.

Everything Everywhere confirmed around 100 directors report in to its vice presidents.

By comparison, O2 and Vodafone have eight and 10 chiefs/directors reporting to UK heads Ronan Dunne and Guy Laurence, respectively.  Sources within O2 and Vodafone described the number of directors reporting to the senior team as “staggering”.

There were suggestions last week the number of vice presidents at Everything Everywhere could increase further. Sources said senior managers are even on the payroll with little clear remit presently, awaiting to be allocated vice presidency roles and dubbed by insiders as “vice presidents of nothing much at all”.

Again, Everything Everywhere pointedly denied the claims.

At the same time, the business is ambitious to utilise its parental R&D resources to introduce new types of products and services, such as quadplay mobile and fixed line voice and broadband, and also digtal television, and to presumably install management of such initiatives.

The defence of its senior management structure came as sources close to the organisation claimed managers working across both Orange and T-Mobile brands are fighting to keep their teams together in light of the September announcement of a further 1,200 job cuts, to hit mostly back-office roles at its London, Hatfield and Bristol offices in January.

Whilst many of those affected by the cuts are understood to be willing to take redundancy packages, others are considered by line managers to be valuable, and victims of the company structure, suggesting it is beholden to costly senior management.

Market watchers estimate Everything Everywhere pays out more than double what its operator rivals pay to remunerate senior management staff, to the tune of several million pounds per annum.

One source said: “It’s very top-heavy; everyone can see that. There is an us-and-them culture being created. There is a huge gulf in terms of salaries, and increasing unrest at the slant of the job cuts.”

Another source remarked: “The cost of reducing the senior management team would be heavy. As it is, important staff, who bring the company very good business, may have to be sacrificed.

He added: “It is an uncertain time for a lot of loyal and productive staff.”

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