Vodafone’s New Boss to Cut 11,000 Jobs as Shares Drop to its lowest Level 

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Margherita Della Valle, the new CEO of Vodafone, announced on Tuesday that she would eliminate 11,000 positions over the course of three years in order to streamline the telecoms group and reclaim its competitive edge as it anticipated a 1.5 billion euro decline in free cash flow this year. One of the most well-known corporate brands in Britain, Vodafone employs almost 100,000 employees throughout Europe and Africa. The layoffs are the largest in the company’s history. Della Valle, who was appointed CEO permanently last month, stated that “our performance has not been good enough” and added that “my priorities are customers, simplicity, and growth.”

The biggest decliner in the FTSE 100 at the opening bell was Vodafone, which fell to its lowest point since early January. According to Matt Britzman, equity analyst at Hargreaves Lansdown, “lackluster performance has been something markets have come to expect from Vodafone in recent times, and full-year results didn’t buck the trend.” Della Valle claimed that Spain, which has recently experienced fierce competition, was undergoing a strategy review while Germany, Vodafone’s largest market, was underperforming.

Vodafone stated it would generate 3.3 billion euros ($3.6 billion) in cash this fiscal year, down from 4.8 billion euros in the year ending in March 2023, underscoring the strains on the business. 3.6 billion euros were predicted by analysts. Pressures in Germany and rising energy prices caused Vodafone’s group core earnings for the year to end-March to fall short of its own forecast by 1.3%, coming in at 14.7 billion euros. The European telecoms industry, according to Vodafone, has historically provided a low return on the capital spent in networks and has gotten worse over time.

Rivals and activist investors have also criticized British businesses for being cumbersome and reluctant to adapt to market changes. In the consumer market, Della Valle said she would prioritize the fundamentals like customer service while maximizing the potential of business clients, a long-standing Vodafone strength. Vodafone has already begun to reduce employment in its major markets; early this year, it lost 1,000 positions in Italy, and a media source claimed that it planned to remove 1,300 workers in Germany. Consolidation is required in important areas like Britain, where Vodafone has been in negotiations with rival Hutchison’s Three UK for at least nine months, according to Della Valle’s predecessor, Nick Read, who resigned in December. 

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