Vodafone will lay off 11,000 employees and push ahead with restructuring – the business

Margherita Della Valle, CEO of Vodafone Group, announced that she is developing a strategy to revitalize the company and profits.after being notified Financial results for the fiscal year 2023.

a The new CEO took office just a month ago and has already designed a restructuring plan for the telecom operator operating in several countriesincluding Portugal, where it has been since 2001 when it acquired Telecel.

The initiative is designed for The company, which had been hurt by declining business, revitalized, particularly in Germany, one of its largest markets.

You 11,000 people will be laid off over the next three years And it must affect the various group companies. Vodafone Group currently employs around 104,000 people.

The restructuring was announced with Disclosure of the company’s annual results, as revenues practically declined, with an increase of only 0.3%, to reach 45.7 billionlower than analyst estimates. Adjusted earnings before charges, depreciation and amortization fell 1.3% to 14.5 billion, below target values.

“Our performance was not good enough. In order to achieve consistent results, Vodafone needs to change,” said Margherita de la Ville, Quoted in a press releaseAdding that the priorities are customers, simplicity and growth.

“We will streamline our organization, eliminate complexity to restore our competitiveness. We will reallocate resources to deliver the high-quality service our customers have come to expect and to nurture the growth of the Vodafone Business’ unique position,” he underlines, in the same document.

a The idea that “Vodafone has to change” is supported by the realization that conditions in the telecom industry require changes. “ The European telecom sector has one of the ROCE [Retorno do capital ou retorno de investimento] lowest in Europe, along with the highest capital investment requirements,” the company notes.

According to the release, this has resulted in a return on investment below WACC (cost of capital) for more than a decade, with an impact on total shareholder return. Vodafone also highlights that Vodafone’s comparative performance has deteriorated over time, which is related to customer experience., recognizing that market positioning and performance varies by geographic region and sector. “When we have the right combination of strong local execution and rational market structure, we can grow and generate returns,” he asserts.

Also of note are the differences between the consumer and business segments, with the business (corporate) area growing in almost all European markets.

The same source notes: “Our transformation must be built on our strengths, but we need to overcome some obvious challenges. We are more complex than we need to be, which limits our local business agility.”

The idea that the telecommunications market does not generate returns for investors has been championed for several years by Portugal’s main telecom operators, and once again was the subject of debate on the state of the nation, at the APDC conference.

In the defined business plan, Vodafone aligns three key points: customers, simplicity and growth. In addition to reducing 11,000 employees, the company will reallocate investments in 2024 to the area of ​​customer experience and brands, but growth initiatives are also designed with a revitalization plan in Germany and ongoing actions in pricing and strategic review in Spain, which this year became part of the Europe group. It is now chaired by Mario Vaz, who was the CEO of Vodafone Portugal.

a SAPO TEK has already questioned Vodafone Portugal to see if redundancies apply to local businesses, but as of this article’s publication, it has not been possible to obtain a response..

Editor’s note: The story has been updated with more information. Last updated 8:33 AM