Vodafone Group PLC (LSE:VOD) plans to cut 11,000 jobs as part of a turnaround plan after its new boss said its performance had been poor.
"Today I am announcing my plans for Vodafone. Our performance has not been good enough. To consistently deliver, Vodafone must change,” Margherita Della Valle, chief executive, said.
“We will focus our resources on a portfolio of products and geographies that is right-sized for growth and returns over time,” Vodafone said.
The telco plans to maximise the potential of Vodafone Business, which continues to accelerate growth, while it pledged to go back to basics to improve its consumer markets.
The FTSE 100-listed firm said the focus would be on three priorities Customers, Simplicity and Growth.
Vodafone is looking to turn around its underperforming German business and announced a strategic review of its Spanish operation.
But in pledging “a leaner and simpler organisation”, the firm said 11,000 jobs are to go.
"We are more complex than we need to be, which limits our local commercial agility," the company said.
For the new financial year, Vodafone forecast adjusted EBITDAaL to be "broadly flat" at around €13.3bn and adjusted free cash flow to be "around" €3.3bn, reflecting expected working capital movements, interest and dividend receipts
The news came as the company unveiled group revenue increased by 0.3% to €45.7bn in the year to 31 March 2023, driven by growth in Africa and higher equipment sales, offset by lower European service revenue and adverse exchange rate movements.
Adjusted EBITDAaL declined by 1.3% to €14.7bn due to higher energy costs and commercial underperformance in Germany.
Germany remains under pressure with a 1.6% drop in service revenue and a 6.1% fall in adjusted EBITDAaL.
Basic EPS climbed to 42.77c from 7.71c while operating profit nearly tripled to €14.3bn from €5.8bn, lifted by gains on the sale of Vantage Towers.
Vodafone reported adjusted free cash flow of €4.8bn, reflecting lower adjusted EBITDAaL and tax phasing, but there was a “significant” reduction in net debt to €33.4bn with proforma net debt to adjusted EBITDAaL improving to 2.5x.
A final dividend of 4.5c was paid, making the total payout 9c, unchanged from the previous year.