Spanish telecoms giant Telefonica said on Wednesday it had reached an agreement with its union to lay off up to a fifth of its domestic workforce as part of cost-cutting measures.
The 3,421 job cuts are expected to take place during the first quarter of 2024 and will primarily affect employees aged 56 or older in 2024 and with at least 15 years of service, Telefónica said in a statement.
The former state monopoly estimates that the workforce reduction plan will cost around 1.3 billion euros (approximately 140 billion yen) before tax, resulting in average annual savings of around 285 million euros starting in 2025. .
Spain’s largest telecommunications company employs approximately 16,500 people in its home country and has more than 100,000 employees worldwide. It is available in 12 countries including Brazil, the UK and Germany.
The job cuts were not as severe as initially expected, with trade unions warning in December that Telefonica was considering cutting nearly 5,100 positions in Spain.
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Telefonica announced on Wednesday that it has agreed a new collective agreement with its trade union until 2026, with the possibility of an extension for another year. The aim is to “become a more digital, flexible and competitive company ready for the challenges of the future.” We are in deep change. ”
Several European telecom companies, including BT and Vodafone, announced job cuts this year as they grapple with fierce competition in a market that is becoming lower-cost in the face of new technologies such as artificial intelligence.
Like its European peers, Telefonica is struggling with heavy debt. One reason for this is the high cost of building a nationwide fiber optic network and deploying high-speed 5G mobile services.
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DS/GV