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Vodafone’s Restructuring Plan: What It Means for Employees and Customers

Vodafone's Restructuring Plan: What It Means for Employees and Customers

Vodafone, one of the world’s largest telecom companies, has announced a major restructuring plan that will affect 11,000 employees worldwide over the next three years. The plan aims to simplify the organization, reduce costs, and improve customer experience and competitiveness. Here are some key points to know about Vodafone’s restructuring plan and its implications for employees and customers.

Why is Vodafone restructuring?

Vodafone’s new CEO Margherita Della Valle, who took over in April 2023, said that the company’s performance has not been good enough and that it needs to change to consistently deliver. Vodafone reported a decline in group core earnings to 14.7 billion euros for the year to end-March 2023, and its share price hit a two-decade low in May 2023. The company faces stiff competition from rivals in its key markets, such as Germany, Spain, Italy, and the UK, as well as rising costs and regulatory pressures.

What are the main elements of the restructuring plan?

Vodafone’s restructuring plan is focused on three priorities: significant investment in customer experience and brand, 11,000 role reductions planned over three years, and a Germany turnaround plan, continued pricing action, and strategic review in Spain. The company said it will simplify its organisation by cutting out complexity and reallocating resources to deliver the quality service its customers expect. The company also said it will invest in its network infrastructure, digital platforms, and product innovation to enhance its customer proposition and drive growth.

How will the restructuring plan affect employees?

The restructuring plan will result in 11,000 job cuts across Vodafone’s global operations over the next three years. The company said it will consult with employee representatives and trade unions on the details of the plan and provide support and assistance to those affected. The company said it expects to incur restructuring costs of about 1.2 billion euros over the next three years, but also expects to generate annual savings of about 1 billion euros by March 2026.

How will the restructuring plan affect customers?

Vodafone said it will improve its customer experience by investing in its network quality, digital platforms, and product innovation. The company said it will offer more personalised and tailored services to its customers, such as flexible plans, loyalty rewards, and value-added services. The company also said it will leverage its unique position in the business segment to offer integrated solutions to its enterprise customers. The company said it aims to increase its customer satisfaction scores and reduce churn rates.

What are the expected outcomes of the restructuring plan?

Vodafone said it expects the restructuring plan to improve its financial performance and competitiveness in the medium term. The company said it expects to return to low single-digit organic service revenue growth by March 2026, and to grow its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin by about 2 percentage points by March 2026. The company also said it expects to generate strong free cash flow of about 5 billion euros per year by March 2026.

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