Vodafone plans to cut 11,000 jobs as new chief executive Margherita Della Valle warns the telecoms group “has to change” to end a period of underperformance in its biggest market and a slump in its share price.
The group said on Tuesday that the job cuts would take place both at Vodafone’s UK headquarters and in the local market as it reported full-year results that fell short of analysts’ expectations.
“We haven’t performed well enough,” said Della Valle, who was named permanent chief executive last month after serving as interim boss following the departure of Nick Read late last year.
Read’s exit comes amid growing shareholder discontent with Vodafone’s struggles in Germany, its biggest market, and concerns that the group is too spread out across Europe and Africa.
According to its latest annual report, Vodafone has around 104,000 employees.
Della Valle announced job cuts as the group’s latest results showed full-year revenue inching up just 0.3 percent to 45.7 billion euros, missing analysts’ expectations. Its adjusted earnings before interest, taxes, depreciation and amortization fell 1.3 percent to 14.7 billion euros, below the company’s guidance of 14.9 billion euros.
Vodafone said its adjusted free cash flow could come in at 3.3 billion euros in the year to March 2024, below analysts’ forecast of 3.8 billion euros, a closely watched metric for the city. The company blamed regulatory changes in Germany for hurting cable providers.
In addition to layoffs, Della Valle is under pressure to simplify the group’s European operations. Reade has been criticized by shareholders for failing to strike deals that would improve Vodafone’s performance in markets such as Spain and Italy.
Vodafone’s shares have fallen 25% in the past 12 months, while the FTSE 100 has risen 4%. Shares in Vodafone fell 3% to 87p in early trade.