Telefonica to cut more jobs than expected

Spanish trade union UGT shared the figure following what will likely be the first of many meetings with the telco.

The announcement, in which UGT reiterated its strong opposition to the cuts and to other measures proposed by Telefonica as it seeks to rehape its domestic business, comes just days after the union reported on the existence of a workforce adjustment plan. At that point we didn't know how many positions would be affected, but speculation was rife in both the Spanish press and the international newswires; while some claimed cuts would top out at around 2,500 or 3,000, El Economista went with as many as 5,000.

It was broadly correct. The final figure is only a shade higher. And it may yet change. As UGT points out, the 5,100 figure represents the number of jobs Telefonica has identified as surplus to requirements, not the number of cuts it actually proposes to make. It hasn't made a firm announcement on that last point. It's a subtle difference, but worth noting.

What we do know is that the cuts – however many there may ultimately be – will be made across Telefonica's three domestic units, Telefónica España, Móviles and Soluciones. They will also be aimed at older workers, born in 1968 or earlier with at least 15 years at the company. While Telefonica will aim to make the cuts through voluntary redundancies, there could also be forced layoffs, the union said.

UGT reiterated that it will not agree to the ERE – that's the type of redundancy proceeding Telefonica is using – unless it can reach accord with the company on certain guarantees and measures that would give stability to the workforce.

Specifically, it opposes plans by Telefonica to abolish a guarantee protecting employees from forced migration; that's moving people's jobs geographically by a long distance. The telco also wants to stop compensating staff for voluntary relocations too, it noted.

Opposition to these plans constitute "a red line" for UGT, it said. That's because "we believe that the company has sufficient mechanisms to guarantee employment in the provinces," it said.

UGT also rejects a proposal from Telefonica to change its professional development model, linking salary levels to performance. This represents a loss of rights to staff, the union said. However, it noted that it has made some progress in discussions with Telefonica in some other key areas.

Nonetheless, full accord between the telco and the unions will be tough to reach. And as discussions continue, industry watchers will keep a close eye on that headline job losses figure. Like its peers elsewhere in the industry, Telefonica clearly needs to get its wage bill down.