Díaz criticizes Telefónica's layoffs: "Public money is not for firing people"

MadridAt the end of 2023, the Spanish government decided to reacquire a stake in Telefónica after its privatization in 1997. The operation was completed in 2024, and today SEPI, the Spanish government's investment arm, is the largest shareholder, holding 10% of the share capital, which involved an investment of over €2 million. Now, the public stake faces its first major test: a workforce reduction plan (ERE) affecting 6,088 employees across Telefónica's seven business units, as reported by the UGT union. This represents 24.3% of the total workforce. Until now, only the Minister for Digital Transformation and Public Administration, Óscar López (PSOE), had commented, stating only that the final decision regarding the plan must be made "in agreement with the unions." But this Tuesday, the second vice president and Minister of Labor, Yolanda Díaz (Sumar), completely overturned the decision of the telecom The Catalan Marc Murtra, who is chaired by Díaz, stated: "I don't think it's right [...]. Public money shouldn't be used to lay off anyone, no matter how good the terms of the workforce reduction plan are," Díaz rebuked at a press conference following the cabinet meeting. "We absolutely do not agree that a company that is profitable and has public funding should lay off more than 5,000 workers," the Minister of Labor reiterated.

In fact, the Ministry has sent a letter to the president of SEPI, Belén Gualda, arguing against the proposed workforce reduction plan, as explained by sources within the Ministry. Díaz's team insists that the proposal to lay off so many employees is "indecent." Rumors of a workforce reduction plan had been circulating around the company for weeks. In fact, during the presentation of the new strategic plan on November 4th, Telefónica had already opened the door to this reduction in staff as a way to cut costs. At that time, its president, Marc Murtra, stated that the plan was supported by all the main shareholders, including SEPI. Sources from the organization chaired by Belén Gualda assert that, as shareholders, they will demand "an agreement with the social partners [the unions] on issues related to employment." "Measures impacting the workforce must be the result of negotiation [...]. SEPI has no doubt that the company and unions will reach an agreement," stated the Spanish government's investment arm.

Workforce reductions in seven different businesses

This Monday, Telefónica communicated the first figures of its workforce reduction plan to the major unions. Initially, the plan affects 5,418 workers in Spain across four of the company's main businesses (Telefónica España, Telefónica Móviles, Telefónica Soluciones, and Movistar+). This Tuesday, however, the telecom The workforce has been added to the list of three other business areas: Global Solutions, where 140 people would be laid off from a staff of 638; Telefónica Digital Innovation, with 233 employees affected out of a total of 933; and Telefónica SA, where 140 workers would be affected. This would bring the total number of layoffs to 6,088 employees, 24.3% of the total in Spain (approximately 25,000 employees across all seven business areas). One of the unions' red lines is that the workforce reduction plan be voluntary, based on early retirements and consistent with the plan already agreed upon in February 2024, when the last workforce adjustment plan was implemented, and when the State was not yet the company's largest shareholder. Likewise, the unions want negotiations to begin to guarantee the conditions of the workers who remain at Telefónica and are demanding an extension of the collective bargaining agreements for the various business units. "You can't talk about the future or transformation of companies without first guaranteeing job stability and the continuity of collective rights," UGT warned.