The Spanish operator says that it will cut between 2,000 and 4,000 jobs through voluntary redundancy in the first half of 2022
Earlier this month Telefonica Group reported its latest quarterly results, posting a net profit of €706 million, compared to a €160 million loss at the same time last year.
These latest results are in fact just a fraction of the profitable year that Telefonica is having, declaring a record €9.34 billion in net profit over the last nine months, primarily as a result of its sale of its tower business, Telxius, to American Tower Corporation for €7.7 billion, and the merger of O2 and Virgin Media in the UK.
In September, it had reduced its total debt to €25 billion, around 32% lower than it was in September 2020.
But while these results are surely positive, they hide a malaise in the company’s home market, Spain, where core profit fell 8.9% in the last quarter compared to the previous year.
Telefonica attributed this decline mainly to the higher energy costs in Spain, something which COO Angel Vila told analysts would likely continue for months to come.
Spain has been a highly competitive telecoms market for many years now, one which many consider to be ripe for consolidation. But while many of the country’s major operators have been linked to merger rumours in recent years, Masmovil’s €2 billion takeover of Basque operator Euskaltel has been the only major movement in the market.
As a result, the operators continue to struggle to streamline their activities, with sources today suggesting that Telefonica is looking to cut between 2,000 and 4,000 jobs in the first half of 2022.
Telefonica currently directly employs around 16,000 people in Spain, meaning the company could stand to lose up to a quarter of its core domestic workforce.
According to the media, negotiations with unions are likely to begin by the end of this month, aiming to cut the jobs through voluntary redundancy with criteria including age and seniority.
Telefonica is not alone in looking to reduce its total staff in the Spanish market, though its rivals have plans to do so on a considerably smaller scale. In recent months, Vodafone Spain has said it will close all of its Spanish retail stores over the next year, laying off over 500 staff, while Orange Spain similarly said they were due to cut around 400 employees.
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