Telefonica Announces Collective Bargaining Agreement for Employee Layoffs in Spain

Telefonica, the Spanish telecommunications company, has recently announced that it has reached a collective bargaining agreement with unions regarding employee layoffs as part of its restructuring plan. The agreement will result in the layoff of up to 3,421 employees in Spain. The cost of these layoffs is estimated to be around 1.3 billion euros ($1.42 billion) before taxes. The layoff period will extend until December 31, 2026, and there is an option to extend for another year.

According to Telefonica, the employee departures are expected to take place in the first quarter of this year. Eligibility for participation in the agreement is granted to individuals who will turn 56 years old or older in 2024 and have been with the company for more than 15 years.

The purpose of these layoffs is to enable the company to achieve average annual savings of approximately EUR285 million from direct expenses starting in 2025. It is important to note that while there will be a positive impact on cash generation from this year, Telefonica emphasizes that the labor force adjustment plan is aligned with its organizational, technical, and production needs.

As stated in its 2022 annual report, Telefonica currently employs 20,947 people in its home market. The proposed workforce restructuring in December initially targeted 5,124 jobs in Spain. However, after negotiations with unions, the final number of affected jobs has been significantly reduced.