VODAFONE is axing 11,000 jobs over the next three years after its new boss said the firm’s performance was “not good enough”.
Margherita Della Valle was promoted to the top job last month and yesterday set out her strategy to turn the struggling phone company around.
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The shake-up includes slashing around 12 per cent of the telecom company’s 90,000 global workforce — the biggest job cuts in its history.
While refusing to say how many of the firm’s 9,000 UK jobs would be at risk, Ms Della Valle did suggest deep cuts would be made at its London global headquarters.
The company has already scrapped 2,300 jobs this year as it races to cut costs.
Investors were unimpressed by it missing financial forecasts and sent the FTSE 100 company’s shares down nine per cent to its lowest level since 2002.
Vodafone said its cashflow would come in at £2.8billion, below forecasts of £3.1billion after legal changes in Germany made an impact on the timing that cable TV bills are paid.
Ms Della Valle, who took over after Nick Read was pushed out last year, said that Vodafone had to make “substantial changes”.
She added: “The steps we have taken in the last few years have been too incremental. We need to be much deeper and faster today in our execution.”
She is already under pressure from activist investors including rivals US telecom group Liberty Global, French mobile tycoon Xavier Niel and the UAE’s E&.
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Paolo Pescatore from PP Foresight, said: “The CEO is tightening the screws. Ultimately, compared to her predecessor, she now must deliver and execute.
“This is a start of a long and painful journey for Vodafone.”
Vodafone, which has hiked customer bills by four per cent so far this year, argues it needs to invest more in the roll-out of the 5G network.
It said merger talks with mobile rival Three were “progressing” which would help share the pain of investment costs.
The UK competition regulator yesterday told MPs that it would not scrutinise the deal’s impact on jobs.
CBI’S PEOPLE PERSON
THE scandal-hit CBI has hired a new chief people officer to rebuild trust in the wake of rape allegations.
Boss Rain Newton-Smith said the lobby group had recruited Elizabeth Wallace to help it “recover from the challenges of recent weeks”.
The British Chambers Of Commerce, meanwhile, is seeking to become the new voice for business.
Bank of England Governor Andrew Bailey and Labour leader Sir Keir Starmer will speak at its annual conference today.
BOOHOOM’S AT AN END
BOOHOO has admitted that the lockdown online shopping boom has fizzled out after losing almost two million customers in a year.
The online fashion site has posted a £90.7million loss, compared to £7.8million profit last year, after an 11 per cent sales slump to £1.76billion.
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The retailer has grown aggressively through acquisitions of fallen high street names, including Debenhams, Karen Millen and Dorothy Perkins.
However, Shaun McCabe, finance chief, dismissed Chinese fast-fashion rival Shein’s plans to open 30 pop-up stores as a “marketing tool”.
Mr McCabe said Boohoo was now racing to lower prices for shoppers by “unlocking deflation” from falling costs of freight, cotton and polyester.
He said the retailer would “sharpen prices” on T-shirts and dresses.
CMA DEFENDS DEAL VETO
THE boss of the UK’s competition regulator has denied it was “doing the bidding” of its US counterpart when it blocked Microsoft‘s £55billion merger with Activision Blizzard.
The Competition and Market Authority’s veto provoked a furious response from Microsoft and the gaming firm, which accused the UK of being “closed for business”.
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The EU’s competition regulator did approve the deal this week.
That move prompted Activision boss Bobby Kotick to say the company, which produces the Call of Duty series, plans to “meaningfully expand our investment and workforce throughout the EU”.
Sarah Cardell, CEO of the CMA, yesterday defended its rejection of the deal, saying the merger “would not represent free and fair competition”.
She also told MPs that US regulators — the Federal Trade Commission — were still suing to block the deal.
But Ms Cardell denied the UK had been influenced by the views of the US on the merger. She said: “We are absolutely not doing the bidding of other agencies.”
Regulator chairman Marcus Bokkerink also rejected suggestions blocking the merger will harm the UK’s reputation.
He also said there is a difference between making the UK attractive to early-stage tech firms — fostering growth — and deals to combine “well-established firms with well-established positions”.
BIG JUMP TO PUMPS
HEAT pumps for homes should get cheaper after Octopus Energy and Legal & General announced a £70million investment in a manufacturer.
Cornwall-based Kensa will be able to install 50,000 a year after the boost, which will also create 7,000 jobs by 2030.
Pumps that absorb heat from the earth are more efficient than gas boilers but still require hefty upfront costs.
The Government wants 600,000 a year by 2028.
‘WE HAVE CONTROL OVER A.I.’
THE owner of ChatGPT has said that its artificial intelligence will “entirely automate away some jobs”.
Sam Altman, chief executive of parent company OpenAI, faced a grilling from the US Senate over the rapid evolution of the technology.
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Mr Altman said it was important to think of ChatGPT “as a tool that people have a great deal of control over”.
Regulators and industry are increasingly worried that the technology’s impact on the economy and culture — including ripping-off music — may only be grasped too late.
In an unusual stance for a tech firm boss, Mr Altman told the US lawmakers that he wanted a regulatory agency to have the power to give licences to AI companies — and to take them away.
The OpenAI boss was also at pains to highlight the benefits of AI, saying that the technology “has the potential to find a cure for cancer”.
