Vodafone's new boss Margherita Della Valle said she would cut 11,000 jobs over three years to simplify the telecoms group, which she said "must change", as it forecast a €1.5 billion decline in free cash flow this year.
"Our performance has not been good enough," said Della Valle, who was appointed permanently last month.
"My priorities are customers, simplicity and growth. We will simplify our organisation, cutting out complexity to regain our competitiveness."
The job cuts are the biggest in the history of the group, which employs around 100,000 people.
Vodafone said it would generate about €3.3 billion of cash this financial year, compared with €4.8 billion in the year to end-March it reported on Tuesday, and around €3.6 billion expected by analysts.
Germany, its biggest market, was underperforming, it said, which combined with higher energy costs resulted in a 1.3 per cent decline in group core earnings to €14.7 billion for the year to end-March, missing its own guidance.
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Growth in Africa and higher handset sales, however, enabled it to eek out a 0.3 per cent rise in revenue to 45.7 billion euros.
Vodafone has recently cut jobs in several of its big markets, shedding 1,000 in Italy earlier this year and a media report said it was looking to cut around 1,300 in Germany.
On the proposed tie-up of its British business with Hutchison's Three UK, Vodafone said there could be no certainty that any transaction would ultimately be agreed. It did not comment any further on the talks.