There’s more bad news to come out of the mobile phone industry this week as Vodafone has just announced that it is to cut 500 jobs. 10,000 people work for Vodafone in the UK, so this figure represents a 5% staff cut, which is sure to be a devastating blow to those who will be affected.

Things have been going badly for Vodafone since the onset of the recession. Handset sales have been hit particularly hard, and although telecoms companies have not being faring as badly as some other industry sectors during the recession, they still need to reduce costs if they are to keep their profits healthy. As well as Vodafone, BT, Virgin Media and Nokia have all had to cut staff in order to stay on top of things.

In figures released recently, Vodafone showed details of the three months up to the end of September 2008. This showed an operating profit down £109 million, and a 1.1% drop in service revenue. British revenue has been hit particularly hard, mirroring problems being faced across the developed market for telecoms companies.

These job cuts in the UK are part of Vodafone's plan to save £1 billion across its global business operations by 2011. The biggest number of staff to go from any one place will be 170 from the headquarters in Newbury, and other jobs will be cut across the country.

Vodafone was keen to point out that it wasn’t just losing staff, but was also employing other cost reduction methods. It released a statement saying that “The majority of savings will be achieved by taking operating costs out of the business”, but this will be little comfort for those losing their jobs.