In a move to enhance efficiency and address financial challenges, Spanish telecoms giant Telefónica is set to reduce its domestic workforce by nearly 5,100 jobs, constituting approximately 25% of its current staff in Spain. This announcement comes as part of the company’s broader efforts to streamline operations, boost productivity, and address technical considerations, according to a spokesperson from the UGT union.
Telefónica, a major player in the telecommunications sector, currently employs around 21,000 individuals in Spain and boasts a global workforce exceeding 103,000. The company operates in 12 countries, including Brazil, Britain, and Germany.
The decision to trim the workforce follows a trend observed in several European telecoms firms, such as BT and Vodafone, which have also announced job cuts this year. Intense competition in a progressively low-cost market has prompted these strategic measures.
Telefónica, like many of its European counterparts, faces the challenge of managing substantial debt levels, causing concerns among investors about its solvency, particularly in light of rising interest rates.
To address its debt situation, Telefónica has undertaken asset sales in recent years, including the divestment of its towers portfolio in Europe and Latin America to US infrastructure specialist American Tower for €7.7 billion in 2021.
Market apprehensions regarding Telefónica’s debts have led to a decline in its share price, falling from nearly €23 in 2007 to just over €4 at present. Despite these challenges, the company reported a net profit of €2 billion last year.
While Telefónica confirmed the impending “adjustment” in its workforce in an official statement, it refrained from disclosing the precise number of jobs slated for elimination as negotiations with unions commence.