Renta 4 | TELEFÓNICA. Signing of the redundancy plan in Spain
1. As expected, Telefónica signed the agreement on the redundancy plan in Spain with the main trade unions yesterday and has signed collective agreements with the seven subsidiaries in Spain until the end of 2030.
2. Redundancy plans have been agreed for 5,500 employees. The conditions of participation will be established in each of the plans.
3. The current value of the expenditure for the redundancy plans for all companies is estimated at a provision of €2.5 billion before tax. For Telefónica S.A. and Movistar+, this will be €2.3 billion, and for the rest, €200 million. The expected savings are estimated at around €600 million per year from 2028, €500 million for the first two companies and €60 million for the rest.
4. The impact on cash generation will be positive from 2026, and Telefónica’s cost savings will begin in Q1 26, when it is estimated that the employees will have already left.
Assessment:
1. The provision of €2.5 billion to be made in Q4 25 is higher than we had expected. This is because Telefónica expects around 1,000 more employees to sign up than the minimum number of voluntary redundancies finally agreed upon, which was 4,525 employees.
2. The provisioned redundancy cost is €454,000 per employee, 20% higher than the €380,000 in the previous redundancy plan for 2023/24. This is because the planned departures would be of younger staff than in the previous agreement. P.O. 4.0. Maintain.
