Telefonica reaches deal to slash 2,700 jobs in Spain

Telefonica announced Tuesday an agreement with unions in Spain to cut around 2,700 jobs, part of a wave of job cuts in the telecom sector in the country this year.

The redundancy plan targets workers turning 55 or older in 2022 and with at least 15 years employment at the company, Telefonica said in a statement. The firm said the job cuts, which will affect about 15 percent of its workforce of 18,500 people in Spain, will cost about 1.5 billion euros ($1.7 billion) this year.

The Spanish telecom giant predicted the staff reduction will produce annual savings of more than 230 million euros from 2023.

Telefonica is the third telecoms operator to announce a round of layoffs in Spain in 2021 following Britain’s Vodafone in September and France’s Orange in May. Like its European rivals, Telefonica has been grappling with relentless competition in its domestic market from low-cost rivals at a time when its needs to fund next-generation mobile networks.

The heavily indebted company has been aggressively cutting costs since Jose Maria Alvarez-Pallete became chairman in 2016. This is the third voluntary redundancy by Telefonica’s Spanish unit in five years. Around 6,300 workers left the firm between 2016 and 2018, while another 2,600 workers took part in a 2019 redundancy plan.