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The operator said it will make the job cuts across its international footprint over the coming three years
Today, Vodafone’s new CEO Margherita Della Valle has unveiled a new strategic plan to revitalise the operator group’s finances, including the loss of roughly 11,000 jobs over the next three years.
Announcing that the company’s results had “not been good enough” and acknowledging that “Vodafone must change”, Della Valle said that the company must move to streamline and simplify its operations and generate efficiencies.
“My priorities are customers, simplicity and growth,” said Della Valle. “We will simplify our organisation, cutting out complexity to regain our competitiveness.”
The operator noted a 1.3% drop in full-year earnings to £12.8 billion, missing its own guidance. The company’s performance was particularly poor in the operator’s largest market, Germany, with lacklustre results also recorded in Spain and Italy.
According to Della Valle, growth is expected to remain flat for the business over the coming year.
That Vodafone is looking at major job cuts – around 12% of its roughly 100,000 global staff – in order to reverse its financial fortunes should come as little surprise. Indeed, under previous CEO Nick Read, the company had devised a €1 billion cost-savings plan, saying in November that driving efficiencies, product improvements, and digitisation would naturally engender some job losses.
Since then, the company has already job cuts in various markets, including in Germany and the UK.
Della Valle herself replaced Read as interim CEO in December last year after investors grew increasing vocal about the company’s falling share price. Her position was made permanent last month, having convinced said investors that she was prepared to make the drastic changes necessary to bolster the business.
“It’s a long road back for Vodafone after years on the slide. But the vision of a leaner, simpler and more efficient organization is the right one, and the move to axe thousands of jobs shows Della Valle is not afraid to make difficult decisions,” noted industry analyst Kester Mann for CCS Insight. “The new boss will also be looking to stamp her mark by quickly agreeing a tie-up with Three in the UK after months of discussions, in a move which would be welcomed by investors but scrutinized by regulators.”
Regarding the potential merger of Vodafone UK and Three UK, Della Valle provided little in the way of updates, saying simply that discussions were ongoing and no decision had yet been made.
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