New boss of Vodafone loses little time and confirms 11,000 jobs are to go, as the operator seeks to turn around its fortunes
Vodafone has embarked on a “new roadmap”, as the mobile operator seeks to improve its performance going forward.
This saw Vodafone on Tuesday in its FY23 preliminary results confirming that following a strategic review over the past five months, it will axe 11,000 jobs. Vodafone currently employs 104,000 people worldwide.
The decision to axe so many jobs is one of the first major decisions taken by Vodafone’s newly installed chief executive officer Margherita Della Valle, who was recently confirmed in the top role after former CEO Nick Read announced in December he was stepping down.
“Today I am announcing my plans for Vodafone said Margherita Della Valle. “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,” said Della Valle. “We will reallocate resources to deliver the quality service our customers expect and drive further growth from the unique position of Vodafone Business.”
Vodafone said that after it had carried out a strategic review over the last five months, it has plotted a “new roadmap” going forward.
The operator said that the European telecommunication sector demands the highest capital investments, but delivers very little in return for shareholders.
“More importantly, the comparative performance of Vodafone has worsened over time, which is connected to the experience of our customers,” it added.
Vodafone said its market position and performance varies by geography and segment. Where it has the right combination of strong local execution and a rational market structure, it can grow and drive returns, it said.
In order to improve its performance, Vodafone has set forth the following “action plan” centred around three priorities – Customers, Simplicity and Growth.
To this end Vodafone will undertake the following:
- Customers: Significant investment reallocated in FY24 towards customer experience and brand
- Simplicity: 11,000 role reductions planned over three years, with both HQ and local markets simplification
- Growth: Germany turnaround plan, continued pricing action and strategic review in Spain
The 11,000 job cuts will impact the firm’s UK headquarters as well as its operations in other countries.
Two decades ago, Vodafone was the world’s largest mobile group, having acquired Germany’s Mannesmann in 2000 in the largest takeover in history.
That deal was valued above $190 billion at the time.
But in 2014 Vodafone exited the lucrative US market when it sold its 45 percent stake in the US operator Verizon Wireless to its partner in the joint venture (Verizon Communications) for $130 billion.
Despite this sale, it is fair to say Vodafone is still one of the world’s largest mobile operators, with operations in 21 countries and it is a major provider of mobile networks in Germany, Spain, Italy and parts of Africa.
It also has partnership agreements with local operators in another 46 locations.
Despite this vast global footprint, Vodafone has struggled to retain market share amid intense competition.
Vodafone’s announcement of the job losses comes as its preliminary FY23 results showed revenue for the year to March grew by just 0.3 percent to €45.7 billion ($49.8 billion).
Net profit for the period came in at €12.3 billion, up from €2.8 billion in 2022 – thanks in large part to a gain on the disposal of Vantage Towers (its mobile mast spin-out) late last year.