Vodafone shares drop 4% after record 11,000 jobs cut as CEO says telco 'must change'

Vodafone introduced plans to chop 11,000 jobs as a part of a turnaround plan from the corporate’s newly-appointed CEO Margherita Della Valle.

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Vodafone shares fell as a lot as 4% on Tuesday, after the British telecommunications agency introduced plans to slash a file variety of jobs and forecast flat revenue progress.

“Our efficiency has not been ok. To persistently ship, Vodafone should change,” not too long ago appointed CEO Margherita Della Valle mentioned in a candid assertion on Tuesday.

Vodafone mentioned it could lower 11,000 jobs over three years, out of a complete headcount of simply over 100,000. That’s the largest spherical of reductions made within the firm’s historical past, Reuters reported.

“My priorities are prospects, simplicity and progress. We’ll simplify our organisation, reducing out complexity to regain our competitiveness. We’ll reallocate assets to ship the standard service our prospects anticipate and drive additional progress from the distinctive place of Vodafone Enterprise,” Della Valle mentioned.

Vodafone reported 45.7 billion euros ($49.7 billion) in revenues for its fiscal yr ended March 31, 2023, roughly unchanged versus the earlier yr.

However it issued a pessimistic steering for the fiscal yr ending March 2024, saying free money movement would fall to three.3 billion euros, versus 4.8 billion euros the yr earlier than. Free money movement is a measure of how a lot money an organization has left after paying working bills and different expenditures.

Vodafone is dealing with strain in key markets similar to Germany and Italy, amid stiff competitors.

Traders have criticized the corporate for transferring too slowly and never making the adjustments crucial to show the enterprise round.

Vodafone has been going via a transition interval since its former CEO Nick Learn stepped down on the finish of final yr. The corporate appointed Della Valle as everlasting CEO in April to remodel the enterprise.

“What’s going to change is the extent of ambition, pace, [and] decisiveness of execution,” Della Valle mentioned in a recorded video on Tuesday.

In the meantime, Vodafone has been in ongoing talks with CK Hutchinson, proprietor of rival telecommunications enterprise Three UK, to hold out a merger. Vodafone mentioned that “there may be no certainty that any transaction will finally be agreed.”

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