Vodafone Group’s new CEO, Margherita Della Valle, said earnings this year will be largely flat as the company slashes jobs and simplifies its corporate structure.
Earnings before interest, taxes, depreciation and amortisation after leases are expected to be €13.3-billion in the year ending in March, the Newbury, England-based company said in a statement on Tuesday. The company said it will cut 11 000 jobs, work to turn around its German business and start a “strategic review” in Spain.
Della Valle, a longtime Vodafone veteran who previously served as chief financial officer and interim CEO before she was made permanent in the top role last month, is charged with turning around the company which has suffered from a lagging share price and difficulty consolidating its sprawling global operations. In the statement, she said she would reallocate resources to focus on the “quality service our customers expect” and grow the Vodafone Business unit.
“Our performance has not been good enough. To consistently deliver, Vodafone must change,” she said in the statement. “My priorities are customers, simplicity and growth. We will simplify our organisation, cutting out complexity to regain our competitiveness.”
New shareholders
She must also grapple with a suite of new shareholders from the telecommunications industry, some of whom are becoming more vocal about their desire to influence the direction of the company. Emirates Telecommunications Group, or e&, has been steadily building a stake and is now the company’s largest shareholder. The United Arab Emirates-backed company’s CEO Hatem Dowidar, a former Vodafone executive, will join the board as a non-executive director, Vodafone said last week.
The Vodafone job cuts are restricted to Europe. Responding to the news, a spokesman for Vodafone’s South African-headquartered subsidiary, Vodacom Group, told TechCentral that it “currently has no plans to reduce headcount, despite the inflationary pressures across the business”.
“The operating environment that we face requires an unwavering focus to deliver our strategy, to meet our business objectives and to serve our customers. We continue to ensure that we have the right measures in place — including our commercial initiatives and cost efficiency programmes — to help mitigate the impacts from the global macroeconomic risks.” — (c) 2023 Bloomberg LP, with additional reporting (c) 2023 NewsCentral Media