Vodafone, the UK-based telecoms giant, has announced its plan to cut 11,000 jobs over three years as it seeks to revive its fortunes. The reduction in staff will affect the company’s UK headquarters and operational centres in several other countries. The job cuts, the largest in the company’s history, form part of a bid to simplify the business and improve competitiveness. The news comes alongside a new strategy focused on investment in customer experience and corporate services, as well as Vodafone’s Q4 financial results. The company’s revenue grew by 0.3% to €45.7bn ($49.8bn) for the year to March, however, adjusted earnings fell short of the firm’s own prediction, reflecting weak performance in its biggest market, Germany.
New CEO, Margherita Della Valle, has taken over with a firm commitment to addressing the company’s poor performance. Plans for personnel cuts aim to provide a simplified business structure, which will lay the foundation for greater competitiveness. Additionally, efforts aimed at increasing customer satisfaction will form a crucial part of the new direction the company aims to take.
As part of the new strategy, Vodafone will cut 1,500 jobs in its Spanish operations, equivalent to 24% of the workforce in the region. This will include sales and customer service personnel, with most of the cuts taking place in the Catalan capital, Barcelona. The layoffs come as recent financial reports show the company’s revenue growth slowing in Spain as the local economy struggles to return to pre-2008 levels and with increased competition.
The move to cut jobs has not been without controversy. Analysts have suggested that such a drastic action may do more harm to Vodafone’s brand than good. Others have pointed to the now-habitual practice within the tech industry of large scale layoffs, which have left over 100,000 people out of work since last year. Tech companies have been pushing to cut back on employee benefits, and many have been urging employees to return to office positions, creating a harsher work environment for their teams.
Despite these concerns, Della Valle has remained resolute in her view that these changes are necessary if Vodafone is to bounce back. The telecoms giant’s Q4 results mark the first significant step in the company’s planned revival, with plans for further restructuring and expansion expected in the coming months.
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