Job Cuts: Telefónica Plans Massive Staff Reduction

Spain's largest telecommunications provider, Telefónica, plans to cut at least 5,040 jobs as part of a comprehensive cost-cutting plan. This was announced by the UGT union (Unión General de Trabajadoras y Trabajadores) on Monday.

According to UGT, cites "organizational, technical, and production reasons" for the job cuts. These affect nearly two-fifths of the total workforce of Telefónica's three main companies in Spain. Accordingly, the job cuts are distributed among 3,649 layoffs at Telefónica España (40% of the workforce), 1,124 at Telefónica Móviles (31%), and another 267 at Telefónica Soluciones (23%). The workforce reduction also extends to the group's four other companies in Spain, the union added. Negotiations on the reduction plans at the parent company Telefónica S.A., as well as Telefónica Global Solutions, Telefónica Innovación Digital, and Movistar+, are scheduled for today, Tuesday.

Involvement of Trade Unions Demanded

UGT demands "that all measures be carried out as a purely voluntary process based on early retirement schemes." Spain's Minister of Labor, Carlos Cuerpo, stated that the government places great importance on the layoffs at Telefónica being carried out with the involvement of trade unions and that the conditions will be improved compared to previous job cuts at the company. "It is important that the process is driven forward together with the trade unions, who will analyze the proposals to improve the conditions compared to the last layoffs," Cuerpo said to Spanish radio station Cadena SER. In 2023, Telefónica cut 3,421 jobs in Spain. According to a spokesperson, the group employs about 25,000 people in Spain and about 80,000 worldwide.

In the past three months, Telefónica was the second-worst performer in the Stoxx Europe 600 Telecommunications Index, with a share price decline of 21 percent. The benchmark index recorded a decline of about seven percent in the same period. This month, Telefónica CEO Marc Murtra presented plans to reduce operating expenses. At the same time, the Spanish group, according to the news agency Bloomberg, lowered its forecast for free cash flow this year from approximately 2.6 billion euros to about 1.9 billion euros and halved the dividend. The forecasts excluded obligations to employees.

(akn)