Telefónica to axe 3,421 jobs in €1.3bn cost-cutting plan

Spain’s telecommunications provider Telefónica is to lay off a total of 3,421 employees as part of a €1.3 billion cost-cutting scheme.

Source: Telefónica

The staff cuts comes following an bargaining agreement Telefónica reached with trade unions which runs until 31 December 2026 and can be extended for a further year.

The plan aims to tackle the challenges of the competitive market and to drive transformation, Telefónica said. According to the company, the deal was unanimously endorsed by Telefónica and the workers’ representatives.

Staff cuts is expected to take place during the first quarter of 2024, with the possibility of additional redundancies.

The telco noted employees who will be aged 56 years or older in 2024 and with a seniority of more than 15 years can adhere in the deal.

In a statement, Telefónica said, “This agreement will allow to continue focus on loyalty and attracting the best talent, invest in the development of differential workforce capabilities through reskilling, improve competitiveness and place Telefónica España at the forefront of new ways of working and work-life balance on the premises of autonomy, responsibility and contribution to results.”

“Average annual savings from direct expenses are estimated around 285 million euros from year 2025. In any case, the impact on cash generation will be positive from 2024,” they added.

The Spanish operator announced in November 2023 it will fully acquire the remaining 28.19% Telefónica Deutschland shares, in a cash offer of EUR 2.35 per share. The offer period commenced in December 2023 and is expected run until mid-January 2024.

The Saudi Arabian telecom stc Group also bought a 9.9% stake in Telefónica for a total of €2.1 billion. If the acquisition is approved by the Spanish government, stc would be the biggest investor in the national telco, ahead of Caixabank and BBVA.