The figure is large enough to shock many Spaniards. Telefonica, Spanish telecoms giant; will cut more than 5,100 jobs in Spain by 2026, or a third of its workforce in this country, as part of a savings plan supposed to improve its profitability. These job cuts, announced Monday during a meeting between management and the unions, will affect all of the company’s activities in Spain, said a union source. They will be implemented gradually between now and 2026, said a source close to the negotiations.
The telecoms group, present in 12 countries, including Brazil and the United Kingdom, currently employs 16,500 people in Spain, out of a total of 100,000 worldwide. It has already eliminated tens of thousands of jobs in the country in recent years.
Contacted by AFP, Telefónica management indicated that it had “communicated to the various employee representatives the adjustment” requested from its various branches of activity in Spain, deemed necessary to “adapt them to the transformation process (…) required by the new digital era. The group, however, refused to confirm the number of job cuts.
Conversions to reduce the bill
According to the UGT union, the social plan will concern employees born before 1968 and with at least 15 years of seniority in the company. The number of departures could also be lower than the 5,100 positions announced, with certain employees being able to benefit from retraining within the company. The UGT “will continue to fight” to defend the “requalification” of employees and “mitigate the impact” of the social plan, specifies the union in a press release, which assures “that there will be no agreement” with management without “guarantees” and measures favoring the “stability” of employees.
A heavyweight in global telephony, Telefónica, like many of its European competitors, is faced with a heavy debt, which raises concerns about its solvency due to rising interest rates and high inflation, which is eating into its profitability. To reduce this debt, the group has carried out significant asset sales in recent years, including the sale of the telecommunications towers of its subsidiary Telxius for 7.7 billion euros. It also carried out several voluntary departure plans, notably in 2015, 2019 and 2021.
These measures have made it possible to reduce the debt, from 50 to 27.5 billion euros since the arrival of José María Álvarez-Pallete at the head of the group in 2016, but not its debt ratio, the company having at the same time seen its capitalization melt.
The arrival of the Saudis worries
The announcement of these job cuts comes at a key moment for the Spanish historic operator, which has been seeking for several years to refocus on its four main markets (Spain, Germany, United Kingdom, Brazil) to be more profitable.
At the beginning of September, the semi-public Saudi group Saudi Telecom Company (STC) thus announced the acquisition of 9.9% of the capital of Telefónica, for a total amount of 2.1 billion euros. This operation caused concern in the Spanish left-wing government, which was warned at the last minute.
In this context, the Public Company of Industrial Participations (SEPI), the investment body of the Spanish State, announced on October 31 that it was carrying out an “exploratory analysis” with a view to “a possible acquisition of a stake in Telefónica”. According to the online media El Confidencial, SEPI would consider taking 5% of the capital, “in conjunction with other national investors”, to “counterbalance the entry of Saudi Arabia” into the Spanish operator.