Vodafone shares drop 4% after slicing a file 11,000 jobs

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 development.

“Our efficiency has not been ok. To constantly ship, Vodafone should change,” lately appointed CEO Margherita Della Valle stated in a candid assertion on Tuesday.

Vodafone stated it could minimize 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 clients, simplicity and development. We are going to simplify our organisation, slicing out complexity to regain our competitiveness. We are going to reallocate sources to ship the standard service our clients count on and drive additional development from the distinctive place of Vodafone Enterprise,” Della Valle stated.

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 circulate would fall to three.3 billion euros, versus 4.8 billion euros the yr earlier than. Free money circulate is a measure of how a lot money an organization has left after paying working bills and different expenditures.

Vodafone is dealing with stress in key markets resembling Germany and Italy, amid stiff competitors.

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

Vodafone has been going by 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, velocity, [and] decisiveness of execution,” Della Valle stated 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 stated that “there might be no certainty that any transaction will finally be agreed.”