Bankinter | Telefónica (TEF) is preparing a redundancy plan based mainly on voluntary departures, which it will negotiate with the unions before the end of the year, according to media reports. The plan would affect more than 6,000 employees across all the group’s subsidiaries.
Bankinter analysis team’s view: Telefónica will present its new Strategic Plan on 4 November. One of the points of the Plan is to simplify the group’s structure and operations to gain efficiency. The workforce reduction plan could amount to ~7,000 employees if it covers the entire group; this would represent 28% of the 25,000-strong workforce.
The plan responds to the need to reduce costs, increase efficiency and shift profiles from more traditional positions to experts in AI, cloud, cybersecurity, Big Data and IoT. Telefónica will likely provision for severance payments in Q4 2025. This could amount to ~€2.6 billion if we take as a reference the €1.3 billion provisions made in December 2023 in the previous redundancy plan that affected 3,421 employees. This amount is equivalent to 10.6% of Telefónica’s market capitalisation or the entire estimated EBITDA for 2025.
This would allow Telefónica to concentrate both the €1.355 billion capital losses from the sale of the Hispam subsidiaries and the redundancy plan provisions in the 2025 financial year so as not to affect the 2026 financial year. The measure would generate savings in personnel costs that we estimate at ~€1 billion per year, ~3.4% of operating expenses.
The Strategic Plan will likely focus on three areas: consolidation in Europe, strengthening Telefónica Tech in the cybersecurity business, and simplifying the group’s structure to gain efficiency. Until then, we believe that the value will remain on hold until the dividend and financing prospects for the
