Vodafone has announced plans to cut 11,000 jobs as part of a turnaround plan from the company’s newly appointed CEO Margherita Della Valle.

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Vodafone Shares fell more than 7% on Tuesday, after the British telecom company announced plans to cut a record number of jobs and expected a drop in free cash flow.

“We haven’t done well enough. To consistently deliver products, Vodafone must change,” newly appointed chief executive Margherita Della Valle said in a candid statement Tuesday.

Vodafone said it would cut 11,000 jobs over three years out of a total number of employees of just over 100,000. Reuters reported that this is the largest round of cuts in the company’s history.

“My priorities are customers, simplicity and growth. We will streamline our organisation, eliminating complexity to regain our competitive edge. We will reallocate resources to deliver the high quality service our customers have come to expect and drive further growth from the unique position of the Vodafone business,” Della Vale said.

Vodafone reported revenues of 45.7 billion euros ($49.7 billion) for the fiscal year ending March 31, 2023, almost unchanged from the previous year.

But it issued downbeat guidance for the fiscal year ending in March 2024, saying free cash flow would drop to 3.3 billion euros, down from 4.8 billion euros a year earlier. Free cash flow is a measure of how much cash a company has left after paying operating expenses and other expenses.

Vodafone shares fell 7% on the gloomy outlook.

Vodafone is facing pressure in key markets such as Germany and Italy, amid stiff competition.

Investors have criticized the company for moving too slowly and not making the changes needed to turn the business around.

Vodafone has gone through a period of transition since former chief executive Nick Read resigned at the end of last year. The company named Della Valle as permanent CEO in April to transform the business.

“What will change is the level of ambition, the speed and the decisiveness of execution,” Della Valle said in a video on Tuesday.

Meanwhile, Vodafone is in ongoing talks with CK Hutchinson, owner of rival telecommunications company Three UK, to carry out a merger. Vodafone said that “there can be no certainty that any deal will eventually be agreed.”


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