Telefonica to cut 5,500 jobs with total cost of 2.5 billion euros

[MADRID] Telefonica will book a cost of 2.5 billion euros (S$3.8 billion) to pay for the exit of about 5,500 employees as part of a sweeping cost-reduction plan.

The Spanish carrier has signed an agreement with unions to implement the exit plans that will lead to average annual savings of about 600 million euros from 2028, the company said in a regulatory filing on Monday (Dec 22).

The impact on cash generation will be positive from 2026 as employee exits are expected to begin as early as the first quarter of next year.

The carrier’s chairman, Marc Murtra, last month outlined plans to cut operating expenses as the company trimmed its free cash flow outlook for this year and halved its dividend. Shares have declined 14 per cent so far this year and are trading at lowest level since 2022.

The plan had already been telegraphed the company’s main workers’ union.

In 2023, Telefonica cut 3,421 jobs in Spain, or about 16 per cent of the workforce. Telefonica employs about 25,000 people in Spain and about 80,000 people globally, according to a spokesperson. BLOOMBERG