Nick Read steps down as Vodafone CEO amidst rocky financials
Read has overseen a 40% drop in Vodafone's share price and in recent months has pointed to the need for company-wide cuts
Vodafone CEO Nick Read is expected to step down by the end of the calendar year, amidst a choppy financial situation for the telco giant.
Read has served as the chief executive officer at Vodafone since 2018, having worked in various executive roles throughout the company since joining in 2002. The reshuffle follows a decline in the company's value under Read, with Vodafone share price down 40% since 2018.
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A successor has not yet been identified but the company’s board is in the process of identifying a worthy candidate. Margherita Della Valle, CFO at Vodafone, will serve in the role throughout the interim, alongside her existing duties. Read will retain an advisory board role until March 2023.
Vodafone has been forced to turn inward following a rough financial period and is reportedly looking for areas in which cuts can be made.
In November, Read had cited a "challenging macroeconomic environment" as the explanation for €2 million in cuts to Vodafone's cash flow forecasts. He pointed to factors such as higher-than-expected energy costs, and Reuters reported Vodafone’s bill is up as much as €300 million year on year.
“Nick Read’s departure is no massive surprise – he had come under growing pressure from disgruntled shareholders amid disappointing stock performance,” said Kester Mann, director of consumer and connectivity at CCS Insight.
“During the latter part of his tenure, Mr Read increasingly sought mergers and acquisitions. Vodafone recently agreed a co-control deal for its towers business and is in discussions with Three UK. But deals in targeted markets such as Spain, Italy, and Portugal have so far proved elusive.
“Mr Read will be remembered for steering Vodafone through the pandemic, narrowing the company’s focus on Europe and Africa, championing the telecoms sector among regulators, seeking a tighter grip on costs, and spinning off its towers business.
“Although only CEO for four years, Mr Read has been at Vodafone for over 20 years. It may have been that a fresh perspective on the embattled company was considered the best way forward. However, the new CEO will face the same tough inbox, with geopolitical uncertainty, rising costs, tough regulation, strong competition, and questions over return on investment for the sector high on his or her agenda.”
In addition to newfound costs brought on by international factors, Vodafone is contending with its ongoing merger talks with Three. If completed, this would see a new company established, with Vodafone golding 51% of shares.
It is unclear to what extent Read was a driving force behind these talks, which had been hoped to complete by 2023, and there are a number of regulatory challenges to overcome before this can happen.
For example, the Competition and Markets Authority (CMA) may conclude that merging the two firms, which serve a combined 26.5 million customers, would negatively impact competition or investment in the sector.
Vodafone is one of many companies that have sought to engage in cuts amidst strong economic headwinds. In November, Meta cut 11,000 jobs admitting failures in its investment strategy, while Twitter fired approximately 50% of its workforce following its acquisition by Elon Musk.
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