Vodafone Group CEO Margherita Della Valle (pictured) demanded change after conceding its performance had not been good enough, as she laid out a strategy revamp which will include 11,000 job cuts over the next three years.
In a full year and fiscal Q4 2023 earnings statement (calendar Q2), Della Valle set out a new roadmap, following a strategic review over the last five months.
The executive stated the circumstances of the industry and Vodafone’s position within it required “us to change”.
It will target four key areas to become a “best-in-class” operator: a rebalance of the organization to maximize the potential of Vodafone Business; wins in the consumer markets; a leaner and simpler organization; and focusing resources on a specific set of products and geographies.
An action plan is already underway covering three priorities: investment in customer experience and brand; simplicity through the job cuts; and targeting a turnaround in struggling markets Germany and Spain.
The job cuts comprise around 10 per cent of Vodafone’s workforce and affect the UK and local markets, with the initial axe falling in Germany and Italy. The company had around 104,000 staff at the end of 2022.
Della Valle had already been rumored to be planning cuts in Italy and mulling the future of its Spain unit, as part of a wider cost-cutting exercise.
Flat
Fiscal Q4 revenue stood at €11.1 billion, down from €11.4 billion in the same period of fiscal 2022.
Full-year revenue was flat at €45.7 billion, as growth in Africa and higher equipment sales were offset by lower Europe service revenue and adverse exchange rate movements.
Net profit rose from €2.8 billion to €12.3 billion, largely due to a one-off gain from the sale of a stake in Vantage Towers.
3 UK
On Vodafone’s earnings call, Della Valle said a proposed deal to acquire rival 3 UK was progressing but was not there yet.
Press speculation in recent weeks suggested an agreement was close, but Della Valle said, “it will take as long as it takes to get a good deal”.
Kester Mann, director, consumer and connectivity and CCS Insight, described the results as uninspiring and said they underlined many of the challenges facing Della Valle, although she could make a mark by quickly agreeing the 3 deal.
“It’s a long road back for Vodafone after years on the slide. But the vision of a leaner, simpler and more efficient organization is the right one, and the move to axe thousands of jobs shows Della Valle is not afraid to make difficult decisions,” he added.
Source: Mobile World Live
