LONDON: Margherita Della Valle, the new CEO of Vodafone (VOD.L), announced plans to simplify the telecoms business and cut 11,000 jobs over the course of three years because it “must change” in light of the telecoms company’s 1.5 billion euro decline in free cash flow predicted for this year.
Della Valle, who was appointed last month said, “Our performance was unsatisfactory. My priorities are growth, customers, and simplicity. In order to regain our competitiveness, we will streamline our organization and remove complexity.”
The organisation, which has some 100,000 employees, is making the largest employment cuts in its history. In contrast to the 4.8 billion euros it announced on Tuesday for the year ending in March, Vodafone predicted that it would generate approximately 3.3 billion euros of cash this financial year.
She claimed that its largest market, Germany, was underperforming and this, along with rising energy prices, caused the group’s main earnings to slip by 1.3% to 14.7 billion euros for the year ended in March, missing its guidance.
However, it managed to eke out a 0.3% increase in revenue to 45.7 billion euros thanks to growth in Africa and increased handset sales. Recently, Vodafone has made job cuts in a number of its major markets. Earlier this year, it dropped 1,000 workers in Italy, and a media source claimed that it planned to lay off 1,300 jobs in Germany.
Regarding the rumoured merger of its British operations with Hutchison’s Three UK, Vodafone stated that there could be no guarantee that any transaction would finally be agreed upon. It made no additional remarks about the discussions.
