By Enyichukwu Enemanna
Telecoms giant Vodafone on Tuesday said it is rolling out a policy to cut at least 11,000 jobs in a bid to streamline operations and improve profitability.
This is part of moves by the company’s new CEO Margherita Della Valle to bring on board fresh ideas that will turn the fortunes of the firm.
Staff at the company’s global headquarters in Paddington would be laid off, in addition to elimination of roles in Germany and Spain to enhance its fortunes.
The job cuts were revealed in CEO Margherita Della Valle’s first set of results since becoming Vodafone’s permanent CEO last month. She said the telecoms giant needed drastic change.
“Our performance has not been good enough. To consistently deliver, Vodafone must change,” Della Valle said.
“My priorities are customers, simplicity and growth. We will simplify our organisation, cutting out complexity to regain our competitiveness. We will reallocate resources to deliver the quality service our customers expect.”
She told the Standard: “It’s coming out of three areas. On top of taking out oversight layers in our HQ, we are also stopping our shared operations where we have unproven business cases, and we are simplifying our markets.”
Vodafone reported a drop in full-year earnings of 1.3% to 14.7 billion euros, falling below the 15-15.5 billion originally guided. The firm said the fall in earnings was due to higher energy costs and commercial underperformance in Germany.
It said it expected earnings to fall further still next year, coming in at 13.3 billion euros.
Vodafone shares fell 4% to 86p after markets opened this morning. Shares are now down more than 28% over the last year.
Della Valle told the Standard, she had expected the share price to fall because of a law change that affects its TV contracts in Germany. Under new rules, bulk TV contracting will be banned, forcing the company to attempt to individually re-contract with around 8.5 million German TV customers, who are responsible for around €800 million in revenues.
“Let’s face it. Our performance in Germany has been unacceptable — I think that’s been clear,” Della Valle said.
“What we are seeing today is the result of the broadband losses that were suffered in previous quarters. We have taken action in terms of a new series of products and promotions.”
