Newbury-headquartered Vodafone to make 11,000 redundancies
Vodafone has set out plans to simplify its business after announcing a set of poor results. These plans include making 11,000 redundancies over the next three years.
Margherita Della Valle, Group Chief Executive, said: “Today I am announcing my plans for Vodafone. Our performance has not been good enough. To consistently deliver, Vodafone must change. My priorities are customers, simplicity and growth. We will simplify our organisation, cutting out complexity to regain our competitiveness. We will reallocate resources to deliver the quality service our customers expect and drive further growth from the unique position of Vodafone Business.”
Vodafone made revenues of £45.7 billion in its latest accounts, up 0.3 per cent on last year, but said that its German business remains under pressured with a drop in service revenue growth of 1.6 per cent. Group revenue growth was driven by growth in Africa and higher equipment sales, offset by lower European service revenue and adverse exchange rate movements.
The company said, in its preliminary results: "The European telecommunication sector has amongst the lowest ROCE (Return on Capital Employed) in Europe, alongside the highest capital investment demands. This has resulted in ROCE being below WACC (Weighted average cost of capital) for over a decade, impacting Total Shareholder Returns.
"More importantly, the comparative performance of Vodafone has worsened over time, which is connected to the experience of our customers.
"Our market position and performance varies by geography and segment. Where we have the right combination ofstrong local execution and a rational market structure, we can grow and drive returns. There are also material differences between our Consumer and Business segments, with Business growing in nearly all European markets.
"Our turnaround must be built from our strengths, but we need to overcome some clear challenges. We are more complex than we need to be, which limits our local commercial agility."
