Vodafone Plans 11,000 Job Cuts
Vodafone has unveiled a turnaround plan to revive its fortunes after years of poor performance, which includes cutting 11,000 jobs over three years.
The job cuts will impact the company’s UK headquarters and operations in other countries, leading to a more than 4% slide in shares in London. Vodafone aims to simplify its organization and regain competitiveness in the telecom industry.
Once the world’s largest mobile telecom group, Vodafone has struggled to retain market share despite having businesses in 21 countries and partnership agreements in 46 locations.
The company employs 104,000 people globally and is a major provider of mobile networks in several European countries and parts of Africa.
Margherita Della Valle, the newly appointed CEO, acknowledged the need for improvement in customer experience and growth.
European telecoms companies, including Vodafone, have delivered lower returns to shareholders compared to their US counterparts in recent years. Vodafone’s performance relative to its major competitors has worsened, impacting customer satisfaction.
The company aims to invest more in enhancing the customer experience and focus on serving corporate clients through Vodafone Business, which is experiencing growth across most of its European markets.
The strategic overhaul comes as Vodafone’s financial results show minimal revenue growth of 0.3% to €45.7 billion ($49.8 billion) for the year ending in March.
Adjusted earnings fell below the company’s own guidance to €14.7 billion ($16 billion) due to high energy prices and weak performance in Germany, its largest market.
Vodafone expects to generate around €3.3 billion ($3.6 billion) in free cash flow for the current financial year, down from €4.8 billion ($5.2 billion) in the previous year ending in March.
