The British telecom giant Vodafone is reportedly set to reduce its workforce by 11,000 over the next three years, as part of the company's efforts to streamline its operations. The cuts will affect various countries, including its UK headquarters, and represent approximately 10% of its global workforce.
Margherita Della Valle, the new CEO and finance director of Vodafone, was quoted saying that the company's performance has been inadequate, thereby necessitating these measures.
Notably, Vodafone UK has been facing challenges due to an increase in energy expenses, resulting in higher costs and a negative impact on its profits. Moreover, it has experienced a decline in sales in Germany, its primary market, along with Italy and Spain where it has encountered difficulties in keeping up with its competitors.
According to the industry regulator Ofcom, Vodafone's broadband service in the UK received the second highest number of complaints among major providers during the three months leading up to December. Additionally, the company experienced an unfortunate incident in April when an issue caused broadband downtime for approximately 11,000 of their UK customers.
Being the interim finance director, Valle said that the company's broadband service in the UK needs to undergo changes to ensure consistent delivery. She added that the priorities are focused on customers, simplicity, and growth. To regain competitiveness, the company plans to simplify its organization by eliminating complexity.
The industry experts speculate that to enhance the company's market share and pricing power, it is essential to concentrate on reducing expenses, implementing the turnaround strategy in Germany, and exploring merger & acquisition prospects both domestically and internationally. This will help the organization in gaining efficiencies and boosting its overall performance.
Vodafone employs 12,000 individuals in Britain and operates from seven offices, including its UK headquarters situated in Berkshire. The company, with a global workforce of 104,000 employees last year, has previously announced its intention to reduce jobs in specific divisions.
Post the announcement, there was a decline of 5% in Vodafone’s share price.
Source Credit: https://www.bbc.com/news/business-65607601