Telefonica, the Spanish telecommunications giant, reached an agreement with unions on Wednesday January 3 to lay off up to 3,421 employees in Spain, or around 20% of the workforce of its three main subsidiaries in the country (Telefónica de España, Móviles and Soluciones), as part of its efforts to reduce costs.
The former state monopoly estimates that the layoffs plan (ERE in Spanish) will cost around 1.3 billion euros before taxes and generate average annual savings of around 285 million euros from 2025.
The staff reduction is part of a plan by Telefonica to increase profits over the next three years, partly through a 600 million euro cost-cutting program announced in November 2023. As Most of its European peers, Telefonica is struggling with high debt (27.5 billion euros in mid-2023, for a turnover of 40 billion in 2022), and increasing costs linked to the deployment of networks of optical fiber and the introduction of high-speed 5G mobile services.
The workforce reductions are expected to take place during the first quarter of 2024 – although the plan will remain in effect until March 2025 – and will mainly affect employees aged 56 or over in 2024, and who have been with the company for at least fifteen years, Telefonica said. The departures mainly concern Telefónica España (2,958) and to a lesser extent the two other companies in the group, Telefónica Móviles (397) and Telefónica Soluciones (66).
New collective agreement
Spain’s largest telecommunications company employs around 16,500 people in its home country, while its global workforce exceeds 100,000 people. It is present in twelve countries, including Brazil, Great Britain and Germany.
The Spanish group also announced that it had concluded a new collective agreement which runs until 2026 and can be extended for an additional year. Big news, the reduction of the working week from 37.5 to 36 hours, at the rate of half an hour per year, very close to the 35 hours demanded by the unions and that the vice-president and minister of labor, Yolanda Díaz, made his mark within the government. Telefonica thus becomes one of the first large companies in Spain to develop this model. The agreement will also allow staff to “telework from the location of their choice in Spain”.
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