As the new CEO lays out her objectives to “simplify” the telecoms behemoth, Vodafone, 11,000 jobs will be removed in the next 3 years.
The reductions will impact the company’s global staff by almost a tenth and its UK headquarters and other nations.
The financial director at Vodafone, Margherita Della Valle, stated that the company’s “performance has not been good enough.”
The company, which employed 104,000 people worldwide last year, has already described plans to eliminate some positions.
The UK’s largest telecom company has suffered from rising energy costs, increasing expenditures and hurting its profits.
Additionally, its biggest market, Germany, Italy, and Spain, where it has struggled to stay up with competition, have suffered reduced sales.
According to Matt Britzman, an analyst at Hargreaves Lansdown’s financial services company, “part of that can be tied to falling customer satisfaction levels in those regions.”
According to the industry watchdog Ofcom, Vodafone’s broadband service in the UK had the second-highest complaints of any major operator in the three months leading up to December.
Ms Della Valle, who took over as Vodafone’s new CEO in January and is currently acting as the company’s temporary finance director while looking for a permanent replacement, stated that the company must evolve to deliver consistently.
“Customers, simplicity, and growth are my top priorities. We shall simplify our organizational structure and eliminate complexity to regain our competitiveness.
It announced the job layoffs after reporting a small increase in full-year revenues to €45.7 billion (£39.7 billion) and a decline in pre-tax earnings.
Additionally, cash flow was reported to have dropped significantly, and earnings were predicted to be “broadly flat” for the current fiscal year.
Nick Read, the previous CEO of Vodafone, resigned in December due to issues with the business’s performance. His four years in command saw a significant decline in the company’s share price.
The business of Vodafone has been “lacklustre” in recent years, according to Mr Britzman, who agreed with Ms Della Valle’s assessment of the company.
He called it “refreshing” that she is open about the difficulties Vodafone is facing, but he added that investors weren’t yet sure she could make things better.
The telecom company’s stock dropped 5% on Tuesday.
She must focus on cost-cutting, the German turnaround plan, and M&A (merger and acquisition) options in the UK and overseas if she wants to increase the company’s market share, find efficiencies, and strengthen its pricing power.
