Vodafone CEO faces £700m cost savings target as FTSE 100 telco loses 73,000 UK mobile customers
A Vodafone store in Newbury, Berkshire (Image: PA Wire/PA Images)
Vodafone’s chief executive has pledged there will be no compulsory job cuts among high street workers following the company’s takeover of Three, as the telecommunications behemoth prepares to find hundreds of millions in cost savings from the deal.
Margherita Della Valle, who orchestrated the massive £16.5bn acquisition shortly after taking charge in 2023, emphasised that physical stores remained crucial to the firm’s customer acquisition strategy.
“From a retail perspective and a property perspective, it’s really important to say that our presence in the high street is really key to our business model… you will continue to see it very strongly,” Della Valle said.
“There will be some duplication but we’ve been very clear… there will not be any redundancies because we really see the high street as a key lever for us.”
Della Valle confirmed the combination remained on course to generate up to £700m in synergies, with benefits expected to materialise in the following year’s financial results, as reported by City AM.
“50 per cent of that will be the network and IT integration and beyond that I would say strong potential for procurement… and then you have areas such as marketing costs, logistics costs that will also follow,” Della Valle explained.
Her comments came as Vodafone shed more than 70,000 UK mobile subscribers during the final quarter of the calendar year, whilst expansion at the group’s German division underwhelmed market watchers. The FTSE 100 telecommunications giant reported that its UK mobile contract customer base fell by 73,000 during the quarter, attributing this decline to the disconnection of approximately 50,000 “very low-value business SIMs.”
Service revenue in Germany, the company’s biggest market, climbed 0.7 per cent to €2.7bn (£2.3bn), though this missed analysts’ consensus forecast of 1 per cent growth, according to Bloomberg data.
Vodafone stated it had “made a fast start” with integration work following its merger agreement with Three, which received approval last year. The firm noted: “Our spectrum and network sharing activation is ahead of plan,”.
Overall group revenue increased 6.5 per cent for the quarter to €10.5bn.
Vodafone shares dropped 5.1 per cent to 108p on Thursday morning. Nevertheless, the stock remains up by more than 60 per cent over the past twelve months.