Vodafone to cut 11,000 jobs

Joining the global drive to cut tech jobs, Vodafone on Tuesday announced plans to slash 11,000 jobs, as it hopes to resuscitate its profitability after years of poor performance.

After the announcement, the stocks of the company plunged 4% in London.

The company added in a statement that the job cuts would be affecting Vodafone’s UK headquarters and operations in four countries.

CEO Margherita Della Valle said: "Our performance has not been good enough. We will simplify our organization, cutting out complexity to regain our competitiveness."

Before nearly twenty decades it was the world’s largest mobile telecom group which also conducted the world’s largest takeover of German Mannesmann in 2000 for over $190 billion.

However, the company struggled to sustain its market share despite doing business with 21 countries and several other local agreements in 46 other locations.

Its annual report showed that Vodafone has 104,000 employees worldwide. The company is the main mobile network provider in Germany Italy Spain and in some parts o Africa.

The CEO Valle said her priorities were customers, simplicity and growth.

Della Valle, who was appointed to the role three weeks ago after almost 30 years with the company, said her priorities were “customers, simplicity and growth.”

McKinsey noted in its report that European telecom companies have fared particularly poorly over the past decade, delivering lower returns to shareholders than in the United States.

Within a challenging sector, Vodafone’s performance relative to peers had “worsened over time,” Della Valle — who was appointed two weeks ago — said in a video.

“Our performance relative to our major competitors in our largest markets has not been good enough, and we know that this is strongly connected to the experience of our customers not being good enough,” she added. Shares in Vodafone have fallen 28% over the past year.

Under its turnaround plan, the company seeks to invest more in its customer experience and focus resources on Vodafone Business to serve its corporate customers — which was growing in the company’s European market.

The development comes after the company’s results showed revenue for the year to March increased only 0.3% to $49.8 billion. Adjusted earnings declined to $16 billion, below the guidance of the company, due to soaring energy prices and poor performance in its biggest market Germany.

Vodafone said it would generate a free cash flow of around $3.6 billion for this financial year, compared to $5.2 billion for the year to the end of March.