Telefónica proposes a workforce reduction plan to lay off 5,319 workers from four of its main businesses

MadridTelefónica has just informed the unions of the initial figures for the workforce reduction plan (ERE) it intends to implement. Initially, the ERE would affect 5,319 workers in Spain across four of the company's main business units (Telefónica España, Telefónica Móviles, Telefónica Soluciones, and Movistar+), according to union sources this Monday at midday, following a meeting with the company chaired by Marc Murtra. This represents 21% of Telefónica's total workforce in Spain (approximately 25,000 employees across all seven business units). To these affected workers must be added the employees of three other businesses (Global Solutions, Telefónica Innovación Digital, and Telefónica SA), although the impact there would be less, union sources told ARA. Therefore, the final number of affected workers would be around 6,000 employees across all seven businesses, according to the same sources. Unions and the company are scheduled to meet again tomorrow, Tuesday, to address this second part of the proceedings. Telefónica officially announced its intention to implement the workforce reduction plan last week. telecom The company justifies the decision on the grounds of "organizational, technical, and production reasons," according to UGT, one of the largest unions within the company. Of the total number of workers currently affected, 3,649 are from Telefónica España (41.04% of the total workforce), 1,124 from Telefónica Móviles (31.34% of the total), 267 from Telefónica Soluciones (23.89% of a workforce of 1,118 employees), and 27. One of the unions' red lines is that the workforce reduction plan (ERE) be voluntary, based on early retirements, and consistent with the ERE already agreed upon in 2024. The unions also want job security guarantees for the remaining staff, so they will open negotiations parallel to those for De3. For UGT, this is one of the conditions for accepting the proposed workforce reduction plan. "It will be impossible to reach a comprehensive agreement if there is no satisfactory progress in the negotiations to extend the current collective bargaining agreement," warns UGT. "It is essential that the economic and social conditions [for those affected by the workforce reduction] be guaranteed," asserts CCOO, the other major union within the company.

Cost of the Workforce Reduction

The restructuring plan will require Telefónica to pay out severance packages, which will affect the dividend payout to shareholders, which will also be reduced next year. For example, in the 2024 workforce reduction plan, Telefónica allocated €1.3 billion to finance the 3,421 voluntary departures. However, in the strategic plan presented on November 4th, the company projected savings of between €1.5 billion and €2 billion in operating costs by 2030. The fear of further staff reductions has been looming over the company for some time, especially after Marc Murtra announced that they would be implemented. In fact, during the presentation of the strategic plan,The company's leadership did not rule out implementing this measure"We have incorporated all the savings opportunities we foresee as feasible, and when I say all, I mean all. [...] If this includes a decision that affects people, what we can say is that whatever we have to do, we will do it hand in hand with the workers' representatives," said Emilio Gayo, CEO of Telefónica, at a press conference.

At a time of transformation for the company—seeking, among other things, new business areas and consolidation in Europe—Telefónica has set its sights on reducing a debt that reached €28.233 billion on September 30. Through September, the company recorded losses of €1.080 billion from the sale of its Latin American subsidiaries.