Sunday, June 4, 2023

Vodafone reviews its strategy in Spain and announces 11,000 layoffs in Europe

Vodafone will cut 11,000 jobs worldwide over three years in a bid to boost its competitiveness, the company’s new CEO, Margherita Della Valle, announced on Tuesday while presenting results. The company employs around 100,000 staff, so the impact will exceed 10% of the workforce and will affect the corporate center in the United Kingdom and subsidiaries in Germany and Italy, according to information provided today.

Regarding the future in Spain, the British telco’s CEO Margherita Della Valle has confirmed that a “strategic review” of the business is being considered in the context of the strong competition the company faces in the country which is “clearly very entrenched”.

Della Valle did not want to specify whether the review considered the sale of Vodafone Spain, as speculated by analysts who heard his intervention. “We cannot predict in advance what kind of measures we will take”, he said,while acknowledging that “there are no quick fixes” for business in Spain.

According to Della Valle, Vodafone will review its business in Spain, which last year became part of Vodafone Europe from an independent division, “to maximize shareholder value over time.”

In the results presented this Tuesday, Vodafone confirmed this poor business performance in 2022. Billings in Spain totaled 3,907 million euros in its fiscal year that ended March 31, down 6.5% from the 4,180 million euros recorded in the previous tax year.

However, in the fourth quarter (between January and March 2023), the revenue decline that had accumulated throughout the year leveled off.

Notably, the company earned EUR 3,514 million from services in its last fiscal, down 5.4% from EUR 3,714 million in the previous year, owing to price competition in the low-end segment and a lower customer base

However, between January and March, income from services stood at 874 million euros, down 3.7% from 908 million euros in the last quarter of the previous year.

In this way, the operator has reversed the declining trend in revenue from services, given that the year-on-year contraction in the third quarter was 8.7%.

The gross operating result (Ebitda) reached 947 million, which is 1.1% less than the previous year.

The group lost 159,000 mobile users and admitted that price hikes hurt business growth. It serves 121,000 customers on broadband and 56,000 customers on television. The converged subscriber base – with various services – has remained “stable” at 2.2 million.

In any case, Spain is not the only problem facing Margherita Della Valle. The new directorship follows the resignation of his predecessor, Nick Read, in early December following pressure from activist funds and some relevant investors of the shareholding.

“Vodafone has to change”, he admitted, as ba usiness is worse than expected. Compared to the competition, “performance has deteriorated over time” and the business sector must be focused in order to gain ground.

Della Vtoen appointed to turn around a company that has suffered losses in the stock market and is facing difficulties in consolidating its global operations. “Our performance has not been good enough.

“We will become a more agile and simpler organization to increase the agility of our business and free up resources,” explained the company, which will focus its resources on a portfolio of products and geographies that deliver growth and profitability over time. is the size

Globally, Vodafone Group earned 0.3% more in its fiscal year, which ended in March, at 45.7 billion euros. Profit rose to 12,335 million euros, a fourfold increase from the previous year, but this was a result affected by the sale of Vantage Towers, a telecommunications tower firm.

Direction has gone ahead that results will be stable this year while it cuts jobs and simplifies its corporate structure and ooffers

Specifically, the company is looking to transform its business in Germany beyond a “strategic review” in Spain. On a positive note, net debt at the end of the year had decreased to EUR 33,375 million compared to EUR 41,578 million in the previous year.

World Nation News Desk
World Nation News Desk
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