British telecommunications giant Vodafone has announced plans to cut 11,000 jobs worldwide. The announcement came following a decline in customer numbers and falling profits. The company currently employs around 90,000 full-time staff, with 14,300 located in Germany, the jurisdiction that is the most important market for the company. In Germany, just 1,300 jobs will be cut, with 400 service and technology-related positions to be created. The cuts are aimed at reducing management, dual-function, and non-customer-facing roles.
The reductions in Germany are part of a wider global restructuring plan, which will continue until 2026. The German cuts will be complete by March 2022, leading to an overall staff reduction of 900. Following that, there will be no more job cuts in the country. CEO Margherita Della Valle explained that the cuts were necessary because our performance was not good enough. Della Valle’s position is a new one; she took over in April after previous CEO Nick Read’s shock retirement announcement in December 2020.
Vodafone’s position has been under significant pressure, reflected in the fall of around 25% in the value of Vodafone Group shares over the past twelve months. Sales at the company have been particularly weak in Germany, where industry rivals Deutsche Telekom and Telefónica (O2) are performing well. Vodafone’s fiscal year, which runs from April to March, showed a continuing decline in customer numbers. While mobile contract customer numbers grew by 65,000 in the second quarter, they only rose by 8,000 in the third and11,000 in the fourth. Numbers of fixed-line customers followed a similar trend.
Vodafone emphasized that it was taking steps to improve its German business, including improving its telecommunications infrastructure, increasing prices, and implementing cost-saving measures. The previous head of Vodafone’s German business, Hannes Ametsreiter, resigned last summer, later being replaced by Philippe Rogge, a former Microsoft executive. In the 2023 fiscal year, the reported EBITDA of Vodafone’s global group shrank to slightly less than €14.7bn, down from €15.2bn. The company attributed this to increased energy costs and a weaker business environment in Germany. While sales increased slightly to €45.7bn, much of the growth was driven by Vodafone’s African business.
