Vodafone, the multinational telecommunications company, has unveiled a three-year turnaround plan to revitalise its business following several years of sluggish performance. As part of this restructuring strategy, Vodafone will cut 11,000 jobs across its headquarters in the UK and other offices around the world. The company expressed that it aims to simplify its organisational structure to improve its competitiveness.
Once the world's largest mobile telecommunications group, Vodafone has struggled to maintain its market position, despite having a presence in 21 countries and partnerships with local operators in another 46 locations. To address these challenges, Vodafone CEO Margherita Della Valle highlighted her priorities as being "customers, simplicity, and growth."
While European telecoms companies have performed poorly over the last decade, Vodafone's relative performance to its peers has worsened over time, according to McKinsey. Della Valle acknowledged that Vodafone's poor performance is closely linked to its customers' experience.
As part of its turnaround strategy, Vodafone plans to invest more in enhancing its customer experience and direct more resources towards Vodafone Business, which serves corporate clients and has been growing in nearly all the company's European markets.
Vodafone's financial results for the year to March showed that its revenue grew just 0.3% to €45.7 billion ($49.8 billion), while adjusted earnings fell to €14.7 billion ($16 billion) due to high energy prices and weak performance in Germany, its biggest market. The company expects to generate free cash flow of around €3.3 billion ($3.6 billion) for the current financial year, compared to €4.8 billion ($5.2 billion) for the year to end March.
Overall, the restructuring plan is aimed at simplifying Vodafone's operations and improving its competitiveness amid a challenging telecoms sector.