Vodafone has revealed plans to lay off 11,000 workers over the next three years, as its newly appointed CEO acknowledges that the company’s performance “has not been good enough.”
This decision follows a strategic review conducted over the past five months. CEO Margherita Della Valle stated that the ultimate goal is to create a “leaner and simpler organization, to increase our commercial agility and free up resources.”
The layoffs will affect employees at both Vodafone’s headquarters and in its local markets. Currently, Vodafone employs 104,000 people globally, as reported in its latest annual report.
“To consistently deliver, Vodafone must change,”
said Della Valle.
“My priorities are customers, simplicity and growth. We will simplify our organization, 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.”
Vodafone’s job cuts are part of a broader trend affecting companies in the tech and communications sectors. Since the start of the year, significant layoffs have been announced by firms such as Dropbox, Red Hat, CDW, F5, and Akamai.
In its fiscal year ending March 31, Vodafone reported revenues of $49.7 billion, which remained roughly unchanged from the previous year. However, the company has issued a negative financial outlook for the fiscal year ending March 31, 2023, highlighting a significant decline in free cash flow.
“Our turnaround must be built from our strengths, but we need to overcome some clear challenges,”
Della Valle commented.
“We are more complex than we need to be, which limits our local commercial agility.”
Besides the layoffs, Vodafone’s action plan includes substantial investment reallocation in fiscal year 2024, focusing on enhancing customer experience and brand. The plan also involves a turnaround strategy in Germany and continued pricing adjustments and strategic reviews in Spain.
“We will change the level of ambition, speed and decisiveness of execution,”
Della Valle asserted.
“We will have empowered markets focused on customers, scale up Vodafone Business and take out complexity to simplify how we operate.”
This comprehensive approach aims to streamline operations and bolster Vodafone’s market position amidst growing industry challenges.
