Telefonica agrees with its unions on the dismissal of 3,421 people in Spain

by time news

2024-01-04 18:51:32
In front of the Telefonica headquarters, in Madrid (Spain), December 3, 2023. JAVIER SORIANO / AFP

Telefonica, the Spanish telecommunications giant, reached an agreement with unions on Wednesday January 3 to lay off up to 3,421 employees in Spain, or around 20% of the workforce of its three main subsidiaries in the country (Telefonica España, Moviles and Soluciones ), as part of its efforts to reduce costs.

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The former state monopoly estimates that the layoffs plan (ERE, in Spanish) will cost around 1.3 billion euros before taxes and will generate average annual savings of around 285 million euros from 2025.

The staff reduction is part of a plan by Telefonica to increase profits over the next three years, partly through a 600 million euro cost reduction program, announced in November 2023. Like most of its European peers, Telefonica is struggling with high debt (27.5 billion euros in mid-2023, for a turnover of 40 billion in 2022), and increasing costs linked to the deployment of fiber optic networks and the introduction of high-speed 5G mobile services.

The workforce reductions are expected to take place during the first quarter of 2024 – although the plan remains in effect until March 2025 – and will mainly affect employees aged 56 or over in 2024, and who have been with the company for at least fifteen years, Telefonica said. The departures mainly concern Telefonica España (2,958), and to a lesser extent the two other companies in the group, Telefonica Moviles (397) and Telefonica Soluciones (66).

New collective agreement

Spain’s largest telecommunications company employs around 16,500 people in its home country, while its global workforce exceeds 100,000 people. It is present in twelve countries, including Brazil, Great Britain and Germany.

The Spanish group also announced that it had concluded a new collective agreement, which runs until 2026 and can be extended for an additional year. Big news, the reduction of the working week from 37.5 to 36 hours, at the rate of half an hour per year, very close to the 35 hours demanded by the unions and that the vice-president and minister of labor, Yolanda Diaz, has made his mark within the government. Telefonica thus becomes one of the first large companies in Spain to develop this model. The agreement will also allow staff to “teleworking from the place of [son] choice in Spain ».

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