Vodafone announces 11,000 job cuts as new boss lambasts performance

Vodafone announces 11,000 job cuts as new boss lambasts performance

Business
May 16, 2023 by secret
139
Chief executive Margherita Della Valle – Ed Robinson/OneRedEye Vodafone has announced plans to cut 11,000 jobs and improve customer service as new boss Margherita Della Valle said the struggling telecoms giant “must change”. Ms Della Valle, who was confirmed as permanent chief executive earlier in May after five months as interim boss, vowed to make
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Chief executive Margherita Della Valle - Ed Robinson/OneRedEye

Chief executive Margherita Della Valle – Ed Robinson/OneRedEye

Vodafone has announced plans to cut 11,000 jobs and improve customer service as new boss Margherita Della Valle said the struggling telecoms giant “must change”.

Ms Della Valle, who was confirmed as permanent chief executive earlier in May after five months as interim boss, vowed to make Vodafone a simpler organisation in a bid to revive its lagging share price.

The sweeping job cuts, which will take place over the next three years, will affect the company’s operations in the UK, as well as global markets.

The company, which employs around 90,000 people around the world, declined to say how many jobs would be lost in Britain.

Ms Della Valle said: “Our performance has not been good enough. To consistently deliver, Vodafone must change.

“My priorities are customers, simplicity and growth. We will simplify our organisation, cutting out complexity to regain our competitiveness.”

Ms Della Valle said Vodafone will focus on the “quality service our customers expect”. It will also look to drive growth through its business division.

The company’s former boss Nick Read, who was abruptly ousted in December, had announced plans to cut costs by €1bn by 2026. He said the move could lead to job losses, but did not put a figure on the impact.

Ms Della Valle, who has served at the telecoms group for almost three decades and was previously chief financial officer, said steps taken over the last few years had been “too incremental”.

The new 11,000 target – which represents more than 10pc of Vodafone’s workforce – came as the company reported a 1.3pc drop in full-year earnings to €14.7bn, which it blamed on high energy costs and continued underperformance in Germany.

Revenues stagnated at €45.7bn, with growth in Africa and higher equipment sales offset by lower service revenue in Europe.

Ms Della Valle is under pressure to simplify Vodafone’s sprawling operations in Europe.

She said the group will focus on turning around its “unacceptable” performance in Germany and launch a strategic review in Spain, which could lead to a sale.

Vodafone, which is headquartered in Newbury, Berkshire, is also trying to finalise a £15bn merger with Three that will create the UK’s largest mobile network operator.

However, talks have been ongoing for months, with the deal held up by leadership changes, disagreements over price and national security concerns.

Ms Della Valle insisted talks were progressing, but added: “It will take as long as it takes to get a good deal.”

The new chief executive is battling to reverse a slump in Vodafone’s share price, which has fallen by more than 50pc over the last five years.

Shares fell a further 3pc on Tuesday morning as the company’s free cash flow missed expectations at €3.3bn. Vodafone blamed this on the timing of payments for cable TV in Germany.

However, net debt decreased by €8.2bn to €33.4bn thanks to disposals.

The figures come a week after Vodafone handed a board seat to the United Arab Emirates’ state-owned telecoms company.

The FTSE 100 company has started a new strategic partnership with e&, which has built up a 14.6pc stake.

Hatem Dowidar, chief executive of e&, has taken a board seat, while the Abu Dhabi-based firm will be entitled to a second seat if its holding increases above 20pc.

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