Capacity reported in December that unions were afraid of a 25% cut in Spanish jobs from the operator, which would have amounted to 5,100 people being laid off.
Telefonica said in a filing with the Madrid stock exchange that the first lay-offs are expected in Q1 24. Employee’s aged 56 or older during 2024 who have spent more than 15 years with the company would be invited to participate in the collective dismissals process agreed with the unions.
In addition, people may be let go in departments and business units that are overstaffed, Telefonica said in the statement.
The cut in staff will cost around 1.3 billion euros before taxes. Telefonica said average annual savings from direct expenses would total 285 million euros starting from 2025.
The impact on cash generation will be positive from 2024, it said
The cuts are part of the company's three-year strategic plan to boost profitability by reducing capital expenditure, raising revenue and cutting costs.
In addition to the agreement on job cuts, Telefonica reached an agreement with unions on collective bargaining that will stay active until the end of 2026.
Telefonica said the agreement will allow it to continue to focus on the loyalty and attraction of the best talent, invest in the development of differential skills for its workforce, and position it at the forefront of new forms of work.
