Vodafone has announced it will cut 11,000 jobs over the next three years just one week after it agreed a strategic partnership with its largest shareholder, Emirates Telecommunication Group Company (e&).
The telecoms provider said in its latest financial update that the job cuts will take place across both headquarters and local markets in a bid to simplify the business. The development comes one week after the company announced a strengthened partnership with e&, which owns $4.4 bn worth of shares in Vodafone.
Under the terms of the agreement, the group CEO of e& will join the Vodafone board as a non-executive director and remain there as long as the company owns a shareholding of 14.6 percent.
Hatem Dowidar, CEO of e&, said at the time of the agreement: ‘Our investment in Vodafone is anchored by [its] established position and worldwide reputation as a prominent industry player that provides cutting-edge connectivity and digital services. We are convinced our strategic relationship will unlock opportunities for both companies to explore the swiftly expanding global telecoms market and next-generation technologies.’
Vodafone must change
Margherita Della Valle, the newly appointed group CEO at Vodafone, says in the annual report the $28 bn firm’s performance ‘has not been good enough’ and, to consistently deliver, ‘Vodafone must change’.
‘My priorities are customers, simplicity and growth. We will simplify our organization, cutting out complexity to regain our competitiveness,’ she explains. ‘We will reallocate resources to deliver the quality service our customers expect and drive further growth from the unique position of Vodafone Business.’
Della Valle took on the new role in April this year after spending more than four years as CFO at the telecoms group.
Total revenue increased by 0.3 percent during the year to €45.7 bn ($50 bn) from €45.6 bn the previous year. The marginal difference was mainly driven by growth in Africa and higher equipment sales and was offset by lower European service revenue and adverse exchange rate movements, according to Vodafone.
Meanwhile, profits for the year declined by 1.3 percent to €14.7 bn from €15.2 bn, with revenue growth reportedly offset by higher energy costs and commercial underperformance in Germany.