Whistleblowers warned a series of senior Vodafone executives – including the current chief executive, Margherita Della Valle – that scores of its franchised store owners faced financial ruin about two years before a high court claim accused the company of “unjustly enriching” itself.
Vodafone employees made repeated complaints to their superiors about the company slashing commissions paid to the small businesses running the company’s high street retail network, according to a string of current and former Vodafone employees. The cost-cutting tactics resulted in a group of 62 of about 150 Vodafone franchise operators filing a 120m-plus legal claim last December.
The telecoms company, which is valued at about 17bn on the London Stock Exchange, has said: “We refute the [legal] claims but will be fully engaging in [a mediation] process with a view to resolving this commercial dispute.”
However, the emergence of warnings to senior management reveals for the first time how some of the mobile operator’s own staff appeared to support the franchisees over their own employer.
The drastic cuts to commission rates paid to franchisees, which were imposed as the country emerged from Covid-19 lockdown in 2020, were blamed for the small business owners running up huge personal debts and fearing for their livelihoods or homes, with some reporting suicidal thoughts.
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