Vodafone plans to lay off 11,000 jobs as new chief executive Margherita Della Valle warned the telecoms group ‘needs to change’ to end a period blighted by poor performance in its biggest market and a falling share price decline.
The cuts will come both at Vodafone’s UK headquarters and in local markets, the group said on Tuesday, after releasing full-year results that fell short of analysts’ expectations.
“Our performance wasn’t good enough,” said Della Valle, who was done permanent managing director 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 group of shareholders unhappy with Vodafone’s struggle in Germany, its largest market, as well as concerns that the group was too thinly spread across Europe and Africa.
Vodafone it employs about 104,000 people, according to its latest annual report.
Della Valle’s scaling came as the group’s latest results showed full-year revenues rose just 0.3 percent to 45.7 billion euros, below analysts’ estimates. Its adjusted earnings before interest, taxes, depreciation and amortization fell 1.3% to 14.9 billion euros, below the company’s guidance of 15 billion euros to 15.2 billion euros.
Vodafone’s adjusted free cash flow, a measure closely watched by the City, was likely to be €3.3bn for the year to March 2024, it said, lower than the €3.8bn expected by analysts. The company blamed regulatory changes in Germany that will hurt cable TV providers.
In addition to workforce cuts, Della Valle is also under pressure to streamline the group’s European operations. Read has come under fire from shareholders for failing to secure deals to boost Vodafone’s performance in markets including Spain and Italy.
Shares of Vodafone are down 25% in the past 12 months compared with a 4% rise in the FTSE 100. Vodafone’s share price fell 3% in morning trading to 87p.
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