Vodafone to cut 11,000 jobs as new boss says firm 'not good enough'
Vodafone will axe 11,000 jobs over the next three years as the new chief executive sets out her plans to "simplify" the telecoms giant.
The cuts equal around a tenth of its global workforce and will affect its UK headquarters and other countries.
Margherita Della Valle, who is also Vodafone's finance director, said its "performance has not been good enough".
Vodafone has 12,000 staff in Britain, based in seven offices including at its UK headquarters in Berkshire.
The firm, which had 104,000 staff worldwide last year, has already outlined plans to cut jobs in some areas.
The UK telecoms giant has struggled with higher energy bills which are driving up costs and impacting its profits.
It has also seen weaker sales in Germany, its biggest market, as well as Italy and Spain where it has struggled to keep pace with rivals.
"Part of that can be tied to falling customer satisfaction levels in those regions," said Matt Britzman, an analyst at investment firm Hargreaves Lansdown.
Vodafone's broadband service in the UK was the second most complained about of any major provider in the three months to December, according to the industry watchdog Ofcom.
It also faced embarrassment in April when a problem knocked out its broadband services for around 11,000 UK customers.
"To consistently deliver, Vodafone must change," said Ms Della Valle, who was appointed as Vodafone's new chief in January, and is serving as its interim finance director until a replacement is found.
"My priorities are customers, simplicity and growth. We will simplify our organisation, cutting out complexity to regain our competitiveness."
It announced the job cuts after reporting a small rise in full year sales to €45.7bn (£39.7bn) and a fall in pre-tax profits.
It also posted a sharp drop in cash flow and forecast earnings would be "broadly flat" for the current financial year.
Vodafone's former boss Nick Read stepped down in December following concerns over the company's performance. During his four years in charge the firm's share price fell sharply.
Mr Britzman agreed with Ms Della Valle's assessment of Vodafone's business, describing it as "lacklustre" in recent years.
He said her honesty about the challenges Vodafone is facing is "refreshing" but investors were yet to be convinced she could turn things around.
Shares in the telecoms giant fell by 5% on Tuesday.
Victoria Scholar, from Interactive Investor, the share trading platform, said Ms Della Valle had a tough task ahead with shares "languishing at lows not seen since the late 1990s".
"She needs to continue to focus on cutting costs, the turnaround plan in Germany and M&A [merger and acquisition] opportunities in the UK and abroad to bolster the firm's market share, find efficiencies, and improve its pricing power."
Vodafone will axe 11,000 jobs over the next three years as the new chief executive sets out her plans to "simplify" the telecoms giant.
The cuts equal around a tenth of its global workforce and will affect its UK headquarters and other countries.
Margherita Della Valle, who is also Vodafone's finance director, said its "performance has not been good enough".
Vodafone has 12,000 staff in Britain, based in seven offices including at its UK headquarters in Berkshire.
The firm, which had 104,000 staff worldwide last year, has already outlined plans to cut jobs in some areas.
The UK telecoms giant has struggled with higher energy bills which are driving up costs and impacting its profits.
It has also seen weaker sales in Germany, its biggest market, as well as Italy and Spain where it has struggled to keep pace with rivals.
"Part of that can be tied to falling customer satisfaction levels in those regions," said Matt Britzman, an analyst at investment firm Hargreaves Lansdown.
Vodafone's broadband service in the UK was the second most complained about of any major provider in the three months to December, according to the industry watchdog Ofcom.
It also faced embarrassment in April when a problem knocked out its broadband services for around 11,000 UK customers.
"To consistently deliver, Vodafone must change," said Ms Della Valle, who was appointed as Vodafone's new chief in January, and is serving as its interim finance director until a replacement is found.
"My priorities are customers, simplicity and growth. We will simplify our organisation, cutting out complexity to regain our competitiveness."
It announced the job cuts after reporting a small rise in full year sales to €45.7bn (£39.7bn) and a fall in pre-tax profits.
It also posted a sharp drop in cash flow and forecast earnings would be "broadly flat" for the current financial year.
Vodafone's former boss Nick Read stepped down in December following concerns over the company's performance. During his four years in charge the firm's share price fell sharply.
Mr Britzman agreed with Ms Della Valle's assessment of Vodafone's business, describing it as "lacklustre" in recent years.
He said her honesty about the challenges Vodafone is facing is "refreshing" but investors were yet to be convinced she could turn things around.
Shares in the telecoms giant fell by 5% on Tuesday.
Victoria Scholar, from Interactive Investor, the share trading platform, said Ms Della Valle had a tough task ahead with shares "languishing at lows not seen since the late 1990s".
"She needs to continue to focus on cutting costs, the turnaround plan in Germany and M&A [merger and acquisition] opportunities in the UK and abroad to bolster the firm's market share, find efficiencies, and improve its pricing power."
