Vodafone to cut 11,000 jobs as CEO says ‘our performance has not been good enough’
Telecoms giant Vodafone today announced sweeping cuts of at least 11,000 jobs as new CEO Margherita Della Valle laid out a fresh turnaround plan to reverse the company’s fortunes.
Staff at the firm’s global headquarters in Paddington would be laid off, in addition to roles in Germany and Spain being eliminated in a bid to streamline operations and improve profitability.
The losses were revealed in CEO Margherita Della Valle’s first set of results since becoming Vodafone’s permanent CEO last month. She said the telecoms giant needed drastic change.
“Our performance has not been good enough. To consistently deliver, Vodafone must change,” Della Valle said.
“My priorities are customers, simplicity and growth. We will simplify our organisation, cutting out complexity to regain our competitiveness. We will reallocate resources to deliver the quality service our customers expect.”
Vodafone had 104,000 staff at the end of 2022. Della Valle could not confirm how many roles in the UK would be impacted by the job cuts.
She told the Standard: “It’s coming out of three areas. On top of taking out oversight layers in our HQ, we are also stopping our shared operations where we have unproven business cases, and we are simplifying our markets.”
Vodafone reported a drop in full-year earnings of 1.3% to 14.7 billion euros, falling below the 15-15.5 billion originally guided. The firm said the fall in earnings was due to higher energy costs and commercial underperformance in Germany.
It said it expected earnings to fall further still next year, coming in at 13.3 billion euros.
Vodafone shares fell 4% to 86p after markets opened this morning. Shares are now down more than 28% over the last year.
Della Valle told the Standard she had expected the share price to fall because of a law change that affects its TV contracts in Germany. Under new rules, bulk TV contracting will be banned, forcing the company to attempt to individually re-contract with around 8.5 million German TV customers, who are responsible for around €800 million in revenues.
“Let’s face it. Our performance in Germany has been unacceptable -- I think that’s been clear,” Della Valle said.
“What we are seeing today is the result of the broadband losses that were suffered in previous quarters. We have taken action in terms of a new series of products and promotions.”
The job cuts and turnaround measures add to an increasingly large in-tray facing the new Vodafone CEO. Last week, the company said the boss of United Arab Emirates government-owned telecoms business e& would join its board as part of a new partnership, and the firm reportedly on the cusp of signing a deal to acquire telecoms rival Three.
“We are continuing to progress on our discussions in the UK but it will take as long as it takes to get a good deal,” Della Valle said.