In a recent announcement, Vodafone’s new CEO Margherita Della Valle revealed a major strategic plan aimed at revitalizing the company’s finances over the next three years. This plan includes the loss of approximately 11,000 jobs, which accounts for 12% of its global staff of around 100,000.
Della Valle stated that Vodafone’s results had “not been good enough” and called for change in the organization. “My priorities are customers, simplicity, and growth,” she said. The focus will be on streamlining and simplifying its operations to regain competitiveness with a new approach.
Vodafone reported a 1.3% drop in its full-year earnings, amounting to £12.8 billion, which missed its own guidance. The company‘s performance was especially dismal in its largest market, Germany, as well as Spain and Italy. The business’s growth is expected to remain stagnant in the upcoming year, according to Della Valle.
These job cuts come as no surprise as the company had already been working towards a €1 billion cost-saving plan under previous CEO Nick Read. The plan focused on driving efficiencies, improving products, and digitizing services, which would naturally lead to some job losses. Since then, Vodafone has already made job cuts in markets such as Germany and the UK.
Della Valle replaced Read as interim CEO in December last year after investors expressed concerns over the company’s declining share price. Her position was made permanent in the following month, as she convinced the investors that she was prepared to make the necessary changes to improve the business.
Kester Mann, an industry analyst for CCS Insight, commented, “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.”
In the context of a potential merger between Vodafone UK and Three UK, Della Valle shared that discussions were still ongoing and no decision had been made yet. Such a merger would be of interest to investors but could face scrutiny from regulators.
In addition to Vodafone’s strategic plan, other news includes the sale of Wind Tre’s majority stake in its network assets to EQT, a roaming agreement between Rakuten Mobile and KDDI, and the CMA’s approval of Viasat’s acquisition of Inmarsat. These developments are expected to shape the UK telecoms market in the coming years, and industry stakeholders will continue to discuss and analyze their potential impact at events such as the 2023 Connected Britain conference.