Vodafone plans to axe 11,000 jobs as new chief executive Margherita Della Valle warned the telecoms group “must change” to end a period blighted by a poor performance in its largest market and a slumping share price.
The cuts will come both at Vodafone’s UK headquarters and in local markets, the group said on Tuesday, as it published full-year results that fell short of analysts’ expectations.
“Our performance has not been good enough,” said Della Valle, who was made permanent chief executive last month after serving as interim boss following the departure of Nick Read at the end of last year.
Read’s exit followed pressure from a growing band of shareholders who were unhappy at Vodafone’s struggle in Germany, its largest market, as well as concerns the group was spread too thinly across Europe and Africa.
Vodafone employs about 104,000 people, according to its latest annual report.
The retrenchment set out by Della Valle came as the group’s latest results showed full-year revenues edged up just 0.3 per cent to €45.7bn, below analysts’ estimates. Its adjusted earnings before interest, tax, depreciation and amortisation declined 1.3 per cent to €14.7bn, short of the company’s guidance.
Vodafone’s adjusted free cash flow, a measure closely watched by the City, would probably be €3.3bn for the year to March 2024, it said, less than the €3.8bn analysts had expected. The company blamed regulatory changes in Germany that will hurt cable TV providers.
Alongside cuts to the workforce, Della Valle is also under pressure to simplify the group’s European operations. Read was criticised by shareholders for failing to secure deals to improve Vodafone’s performance in markets including Spain and Italy.
Shares in Vodafone have fallen 25 per cent over the past 12 months compared with a 4 per cent gain in the FTSE 100. Vodafone’s share price fell 3 per cent in early morning trading to 87p.