Telefonica job cuts will be in the thousands

The Spanish operator told trade union UGT that it will shed staff, the union disclosed on Monday, via a statement that doesn't tell us much about what is actually going on. Indeed, at this stage the union itself doesn't have any details, other than that Telefonica is pushing ahead with an exit plan.

UGT has been on Telefonica's case since its Capital Markets Day earlier this month, at which it fleshed out and kicked off its new three-year strategic plan, dubbed GPS. The plan is all about increasing cash and reducing debt, which naturally raised questions about workforce reduction. But despite UGT's best efforts, the telco has not been forthcoming on details.

The Spanish press is working hard to fill in the gaps though.

Job losses will come in at a minimum of 1,600, or 10% of Telefonica's workforce across the three affected subsidiaries – Telefónica España, Móviles and Soluciones – El Economista reported. It was able to reach that conclusion because the telco is carrying out the cuts via a type of redundancy proceeding known as a Expediente de Regulación de Trabajo, or ERE, the minimum level of which is a 10% cut.

The paper puts the maximum figure at 5,000, comprising the 2,500 employees of the three business units that are 55 years old or more, plus another 2,500 who will reach that age next year.

Meanwhile, Reuters quotes two other papers, Expansion and Cinco Dias, as predicting losses of 2,500 and 3,000 respectively.

Essentially, we're looking at a ballpark few thousand job losses, and even in a company the size of Telefonica, that's enough to be newsworthy.

We should have more clarity on the figures in a matter of days. The newswire spoke to UGT and learned that the relevant parties will begin assembling round the negotiating tables next week and the official number of workers affected will be communicated then.

According to El Economista, a key point of negotiation for the unions will be around the treatment of the remaining 13,000-14,000 employees remaining at Telefonica in Spain following the cuts, specifically guarantees on salary reviews and job stability. They will also focus on increases in teleworking, the 35-hour working week, and various other benefits for remaining staff.

Meanwhile, Telefonica employees elsewhere in the world should also prepare for a similar outcome, the paper says. It excludes newer business units like Telefonica Infra and Telefonica Tech – the latter is currently being valued by banks ahead of a possible sale, incidentally – but warns that all other Telefonica businesses could see workforce reductions on the back of that GPS plan.

Given how strongly Telefonica is focusing on shoring up its finances under that strategic plan, and taking into account the headcount culls enacted by some of its international peers in recent months, the news that more job losses could be on the cards comes as no surprise. We'll keep an eye out for further announcements.