Telefónica has outlined a plan to cut slightly over 5,000 jobs in Spain, marking one of the company’s most significant workforce restructurings in recent years. The proposal has been presented to unions as the telecoms group seeks to streamline its operations and focus on four core markets: Spain, Germany, the UK, and Brazil.
Job Cuts Across Telefónica Divisions
According to a person familiar with the discussions, the final number of job reductions could end up being lower, depending on negotiations.
Breakdown of the proposed cuts:
- Telefónica Spain: ~3,650 jobs (41% of total cuts)
- Telefónica Mobile: just over 1,100 jobs (31%)
- Telefónica Solutions: around 270 jobs
A follow-up meeting between Telefónica and union representatives is scheduled for Tuesday.
Restructuring Follows Disappointing Investor Reaction
The announcement comes only weeks after Telefónica’s capital markets day, where the company revealed it would:
- Halve its dividend
- Concentrate investment and strategy on its four priority markets
However, investors expressed disappointment over the lack of broader restructuring measures, sending Telefónica shares down more than 13% on the day of the announcement.
Murtra’s Strategic Vision
New chairman and CEO Marc Murtra, appointed in January with the support of the Spanish government and other shareholders, has signaled ambitions to pursue mergers to strengthen Telefónica’s position. No new deals were announced as part of the latest strategic update.
Murtra said his goal is to reposition Telefónica as a “world-class European telco with profitable scale.” He also acknowledged several internal challenges the company must address:
- Organizational complexity
- High levels of debt
- Short-term decision-making
- A historical reluctance to take tough strategic actions
Cost-Cutting Trend Across Europe’s Telecom Sector
Telefónica’s move aligns with a broader pattern of cost reduction among European telecom operators:
- Liberty Global, co-owner of Virgin Media O2 with Telefónica, is preparing job cuts affecting hundreds of its 1,900 UK employees.
- BT may cut additional roles depending on how artificial intelligence transforms its operations; the company has previously announced plans for up to 40,000 job cuts by 2030.
Market Reaction
Telefónica shares edged up 0.3% to €3.68 in late Madrid trading, but the stock remains down almost 15% over the past year.
