Telefónica officially announces a workforce reduction plan (ERE) due to "objective reasons" in seven businesses

MadridTelefónica has officially announced its intention to implement a workforce reduction plan (ERE). In a meeting with the main unions held this Monday morning, the company, chaired by Marc Murtra, announced that the ERE will affect seven of Telefónica's businesses, most notably Telefónica España, Telefónica Móviles, and Telefónica Soluciones. These three businesses are joined by Global Solutions, Telefónica Innovación Digital, and Movistar+. UGT, one of the main unions, explained that the company justified the decision on "objective grounds," according to a press release. "We will negotiate in good faith, through dialogue and consensus, but with firmness," UGT stated. The CCOO union also issued a statement. The union will fight to guarantee the "voluntary and universal nature" of the workforce reduction plan (ERE), "adequate" economic and social conditions, and that it be "linked to retirement" and not have "economic disadvantages" for the staff. The unions criticized management for using this as a way to implement "organizational adjustments" within the company.

The fear of further staff reductions has been looming over the company for some time, especially after its president, Marc Murtra, announced that he would implement "ironclad financial discipline." 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," stated Emilio Gayo, CEO of Telefónica, at a press conference.

The workforce reduction that will now begin to be negotiated would affect some 6,000 workers, according to information obtained by ARA from sources familiar with the process. The majority of the affected workforce would be from the Telefónica España, Telefónica Soluciones, and Telefónica Móviles businesses. With the formal communication on the table, the negotiations have officially begun. Now, the unions will have to choose the representatives who will begin negotiating with Telefónica starting next Monday.

This is one of the largest workforce reduction plans (EREs) the company has implemented to date, and union sources predict it will be the last of this magnitude. The number of employees who joined from the mid-1970s onward is plummeting, unlike the number of workers who joined between 1969 and 1971.

A workforce reduction plan with the State as a shareholder

One of the unions' main battles once negotiations begin will be to safeguard the voluntary nature of the workforce reduction plan (ERE), as well as the conditions for the employees who remain, and to seek guarantees that these conditions will not worsen. For example, preventing forced employee transfers, whether between business units or regions. Therefore, negotiations to extend the collective bargaining agreements will take place in parallel with the ERE negotiations. The next meeting between the company and the unions is scheduled for Monday, November 24. "UGT will not support any ERE without ensuring the future of all the workers who remain with the company," the union stated. "Normally, the social and economic conditions of the ERE are favorable," said union sources, who noted that in the last ERE, more workers applied than the number of applications expected. Specifically, the last ERE at the company was implemented more than a year ago, in February 2014, when José María Álvarez-Pallete was still president. The restructuring plan affected a total of 3,421 people. What makes this restructuring plan unique is that it comes with SEPI, the Spanish government's investment arm, as the company's largest shareholder, holding 10% of the share capital.