London – Vodafone, the multinational telecom company, has unveiled a turnaround plan aimed at revitalizing its business after years of poor performance. As part of the plan, the company announced that it will cut 11,000 jobs over the next three years, affecting its UK headquarters and operations in other countries. The news sent Vodafone’s shares sliding more than 4% in London.
CEO Margherita Della Valle acknowledged that the company’s performance had not been satisfactory, stating, “Our performance has not been good enough. We will simplify our organization, cutting out complexity to regain our competitiveness.” Della Valle, who assumed the role just three weeks ago after nearly three decades with the company, outlined her priorities as focusing on customers, simplicity, and growth.
Vodafone, once the world’s largest mobile telecom group, has faced challenges in retaining market share despite its presence in 21 countries and partnership agreements in 46 additional locations. In 2000, the company made history with the acquisition of Germany’s Mannesmann for over $190 billion. However, in recent years, Vodafone’s performance has lagged behind its competitors, especially in its largest markets.
European telecoms companies, including Vodafone, have struggled to deliver returns to shareholders comparable to their American counterparts, according to consulting firm McKinsey. In response to this trend, Della Valle acknowledged that Vodafone’s performance relative to its major competitors had worsened over time, attributing it to the unsatisfactory experience of its customers. The company’s shares have fallen by 28% in the past year.
Under the new turnaround plan, Vodafone will focus on investing in its customer experience and allocating more resources to Vodafone Business, the division that serves corporate clients. Vodafone’s Business has shown growth potential in almost all of the company’s European markets.
The announcement of the turnaround plan coincided with the release of Vodafone‘s financial results for the year ending in March. The report revealed a modest revenue growth of 0.3% to €45.7 billion ($49.8 billion). However, adjusted earnings fell short of the company’s guidance, amounting to €14.7 billion ($16 billion), primarily due to high energy prices and a weak performance in Germany, which is Vodafone’s largest market.
Vodafone expects to generate a free cash flow of approximately €3.3 billion ($3.6 billion) in the current financial year, compared to €4.8 billion ($5.2 billion) in the previous year ending in March.
The telecom giant’s strategic overhaul and cost-cutting measures are aimed at revitalizing the company’s fortunes and improving its competitive position in the challenging telecommunications sector. Vodafone remains committed to delivering enhanced customer experiences and driving growth in key markets moving forward.
About Vodafone: Vodafone is a multinational telecom company headquartered in the United Kingdom. With a presence in 21 countries and partnership agreements in 46 additional locations, the company provides mobile network services in various markets, including Germany, Spain, Italy, and parts of Africa. Vodafone is undergoing a turnaround plan to address its poor performance and regain its competitive edge in the industry.
