Vodafone says it will make 11,000 redundancies as part of a plan to “simplify” its business. The mobile operator’s performance has “not been good enough” according to its new CEO, with the amount of cash at its disposal to drop by €1.5bn over the next 12 months.
The news came as Vodafone delivered its full-year financial results, which show income remained static in the 12 months to the end of March. The network was able to point to slight growth in its Vodafone Business segment, with revenue from enterprise clients up 2.6% year-on-year, and is pinning its hopes to grow its business on expanding the reach of Vodafone Business in Europe and beyond.
Vodafone job cuts will ‘simplify’ business
Vodafone’s 2023 revenue came in at €45.7bn, up 0.3% on the 2022 figure of €45.5bn. It anticipates relatively low growth in the coming year, and says that its free cash flow in 2024 is likely to drop to €3.3bn, from €4.8bn this year.
Because of this, Margherita Della Valle, Vodafone’s chief executive, says big changes are coming, and this will see 11,000 staff losing their jobs over the next three years. Vodafone employs about 100,000 people around the world, and today’s announcement is the biggest round of redundancies in the company’s history.
“Our performance has not been good enough,” Della Valle said. “To consistently deliver, Vodafone must change. 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 and drive further growth from the unique position of Vodafone Business.”
How Vodafone plans to turn its business around
Vodafone’s annual revenue has been largely static since 2019, despite the network’s involvement in 5G roll-outs and digital transformation projects in markets around the world.
Della Valle replaced former CEO Nick Read, who had been in post since 2018, in December, initially on an interim basis, before getting the job full-time earlier this year. She was formerly the company’s CFO, and as part of today’s results announcement, Vodafone revealed how it plans to grow its income.
It will be based on becoming “Europe’s leading platform for business”. A statement from the company explained: “We will rebalance our organisation to maximise the potential of Vodafone Business, which continues to accelerate growth, has a unique set of capabilities and has a strong position in a large and growing market as organisations digitise.”
The statement added that there will be “significant investment reallocated in 2024 towards customer experience and brand”.
There was no update on the proposed merger between Vodafone in the UK and Hutchinson’s Three network. Talks between the companies have been ongoing since last year.