Topline
Vodafone, a British telecommunications company, plans to layoff 11,000 employees over the next three years, the company said Tuesday, citing an effort to remain competitive, as it continues to negotiate a potential merger with another UK phone operator.
Mobile phone carrier Vodafone said Tuesday, May 16, 2023 it’s laying off 11,000 workers as part of a … [+]
Key Facts
Vodafone employees 104,000 worldwide and will cut positions at its UK headquarters and operations in other countries, the company said.
CEO Margherita Della Valle said the companies’ performance “has not been good enough” and changes had to be made in order to “consistently deliver.”
As part of its “turnaround” plan Vodafone said it would direct more resources towards Vodafone Business, a leg of the company that serves corporate clients, as that division has continued to accelerate growth for the company.
Della Valle told reporters Tuesday that Germany, the company’s biggest market, was underperforming, and said in Spain a “structural change,” or full or partial sale, was possible, Reuters reported.
Free cash flow is estimated to fall from $5.2. billion to $3.59 billion for the fiscal year ending March 2024, according to the announcement, another sign of the company’s outlook.
The cuts are the largest reductions made in the company’s history, according to Reuters.
Key Background
At the end of last year the company’s former CEO Nick Reed stepped down as is chief executive. Della Valle was then appointed permanent CEO in April. Tuesday’s announcement of layoffs marks the first major action by Della Valle since she took the helm. The telecommunications company faces a steep hill as it tries to keep up with competitors in the 21 countries where Vodafone has business. A deal to merge with Three UK, could help, and would cut the number of mobile phone operators in the UK from four to three, bringing the value of the combined companies to $18.79 billion including debt, the Financial Times reported.
What To Watch For
A deal between Three UK and Vodafone. Earlier this month, the Financial Times reported an agreement is expected to be announced this month.
Big Number
$49.7 billion. That’s how much Vodafone’s revenue was for its fiscal year that ended March 31.
Further Reading
Spring 2023 Layoff Tracker: Nuro Slashes 340 Employees (Forbes)
First Quarter 2023 Layoff Tracker: Meta, Amazon, Twitter, Twilio Make Cuts (Forbes)
Source: https://www.forbes.com/sites/anafaguy/2023/05/16/vodafone-slashes-11000-jobs-amid-potential-merger/