Telefónica, more than 5,300 redundancies in the new restructuring plan

Telefónica, the Spanish telecommunications giant, is preparing for one of the most drastic slimming cures in its recent history. The trade unions speak of a plan of more than 5,300 cuts in Spain alone, which would have been communicated to them by the company. An earthquake that comes as the telco, squeezed between debts, investments and the structural slowdown in the sector, tries to reinvent itself.

According to the UGT, the plan is surgical and affects the pillars of the group: 3,649 posts in Telefónica España, 41% of the workforce; 1,124 in Telefónica Móviles (31.3%); 267 in Telefónica Soluciones (23.9%). And that is not all: a further 279 redundancies are expected at Movistar+, the group's TV offering, amounting to 32.4% of employees. Numbers that photograph a radical transformation rather than a simple restructuring. Also because they come after another downsizing, that of 2023, when 3,421 posts were eliminated, equal to 16% of the staff in Spain.

The operation is rooted in the accounts: in the first nine months of the year, the company posted a net loss of 1.08 billion and announced a 3 billion savings plan by 2030. The decision to halve the dividend caused the share price to plummet by 13% in a single session, the third worst slump ever. This latest decision was part of the new 'Transform & Grow' plan presented by new CEO Marc Murtra, in office since January. The goal, the group explained at Capital Markets Day earlier this month, is to 'reduce debt to 2.5 times net debt-to-equity ratio by 2028', up from 2.9 times today. Murtra wants a leaner company focused on its four key markets - Spain, Germany, the UK and Brazil - with organic growth in revenue and Ebitda of between 1.5% and 2.5% in the period 2025-2028 and up to 3.5% in 2030.

However, JPMorgan analysts also noted that the new free cash flow guidance - EUR 1.9 billion this year, against the expected EUR 2.6 billion - was 20 per cent below expectations for 2028. Finally, looking at the stock on the stock exchange, Telefónica recorded the second worst performance in the Stoxx Europe 600 Telecommunications index over the past three months, down 21%, compared to about -7% for the benchmark.

The State, through Sepi, is also the operator's main shareholder, having acquired 10% of the capital in 2024 for EUR 2.285 billion. A variable, this, to be considered in the operation that also stems from technological evolution: automation and the farewell to the old copper network, replaced by fibre, allow all operators to operate with less personnel. The unions, however, have made it clear that there will be no compromise on the principle of voluntary redundancies.