Troubled Vodafone to axe 11,000 jobs as new boss says performance ‘is not good enough’ 

Vodafone shares crashed to their lowest level in more than two decades as its new chief executive’s blueprint to turn the company around fell flat.

Margherita Della Valle unveiled plans to slash 11,000 jobs over the next three years after warning that the telecoms giant ‘must change’ in order to end a period of poor performance and revive its flagging stock price.

The cuts, equivalent to over 10 per cent of the FTSE 100 firm’s 90,000 global workforce, will be focused on Vodafone’s UK headquarters as well as its local markets.

Slump: Vodafone shares crashed to their lowest level in more than two decades as its new chief executive’s turnaround plan around fell flat

It came as Della Valle, who became permanent chief executive of the group last month, said the firm’s performance ‘has not been good enough’ and previous steps to improve the business were ‘too incremental’.

‘We need to be much deeper and faster today in our execution,’ she said.

‘We will simplify our organisation, cutting out complexity to regain our competitiveness.’

But the strategy received a frosty reception from investors and the shares fell as much as 10 per cent to around 81p, their lowest level since 2002 following the bursting of the dot com tech bubble. 

They later closed down 3.1 per cent, or 2.76p, to 87.27p.

Analysts warned of ‘glaring flaws’ in Della Valle’s plan and said ‘the share price fall shows the group isn’t fooling anyone’.

Della Valle served as Vodafone’s chief financial officer before taking over as chief executive on an interim basis following the exit of Nick Read at the end of last year as shareholders pressured the group to improve performance, particularly in its core German market. 

Before his ousting, Read unveiled plans last year to drive around £883million of cost savings. 

Italian Della Valle faces uphill battle 

Job cuts: New Vodafone boss Margherita Della Valle

Margherita Della Valle has wasted no time in setting out her plans to revive Vodafone – but weary investors remain far from convinced. 

The telecoms giant’s new boss spent the best part of four months auditioning for the role, having taken over on an interim basis earlier this year following the departure of Nick Read – but she is making her mark. 

While cutting 11,000 jobs will do that, much work elsewhere has taken place since she took over.

The group sold its 70 per cent stake in Vodafone Ghana to African telecoms group Telcel in February and, in March, finalised a fibre internet joint venture in Germany with French group Altice. 

Last week, it deepened its ties with its largest investor, Emirati telecoms giant E&. But Della Valle, 58, faces issues with driving growth in Germany. 

There is also the matter of concluding a merger between the UK arm and rival Three. 

The firm said at the time it could lead to job losses but did not put a figure on the number of roles being cut.

Aside from slashing its workforce, Della Valle said Vodafone will launch a strategic review of its Spanish business.

Merger talks between the telecoms operator and Three UK owner CK Hutchison were also ‘progressing’, she said, adding a deal would ‘take as long as it takes’ but a tie-up between the network and its UK arm would be ‘good for customers and good for the country’.

Plans for a radical overhaul came as Vodafone posted a disappointing set of annual results that saw earnings fall 1.3 per cent to £12.7billion for the year to the end of March, below the company’s guidance of more than £13billion.

Revenues edged up 0.3 per cent to £39.7billion but were lower than analysts had predicted.

The company’s cash flow forecast for the coming year also alarmed observers, with Vodafone predicting around £2.9billion in its 2024 financial year, a sum not much higher than its £2.2billion dividend for 2023.

Karen Egan, senior telecoms analyst at research house Enders Analysis, said the cashflow guidance was ‘disappointing’ in light of the dividend bill as well as other costs related to restructuring.

This post first appeared on Dailymail.co.uk