Bankinter | Telefónica has proposed a redundancy plan for 5,319 employees of Telefónica España (3,649 people; 41% of the total), Telefónica Móviles (1,124; 31%), Telefónica Soluciones (267; 24%) and Movistar+ (279; 32%). It could still announce further redundancies in the three remaining companies in Spain (Telefónica Global Solutions, Telefónica Innovación Digital and Telefónica S.A.), which could bring the total to 6,000 employees. The actual departures will take place from 2026 onwards.
This is a substantial reduction representing 37% of the workforce of the companies involved and 5.3% of the group’s total workforce at the end of 2024 (100,870 employees). It is part of the new 2026/2030 Strategic Plan focused on simplifying the operating model and gaining financial flexibility and scale.
The plan responds to the need to reduce costs, improve 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. These could amount to ~€2 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 in Spain. This amount is equivalent to 9.8% of Telefónica’s market capitalisation or the estimated EBITDA for 2025. With this, Telefónica would 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 ~€750 million per year, ~2.6% of operating expenses in 2024. The measure was expected within the framework of the Strategic Plan, which, however, forecasts EBITDA growth similar to that of revenues, i.e., without contemplating an improvement in margins. The targets point to revenue, EBITDA and operating cash flow growth of +1.5%/2.5% in 2025/2028 and +2.5%/+3.5% in 2028/2030. The expected growth rates are modest and below the weighted inflation rate of its markets, while debt remains stable and higher than that of its peers, with a high dividend yield (~4%) but not guaranteed.
