Telefónica closes redundancy proceedings affecting 3,421 employees

telefonica logo nuevo

Link Securities | Telefónica’s most representative trade union organisations have reached an agreement to sign the Third Collective Bargaining Agreement for Related Companies, valid until 31 December 2026 and extendable for a further year, with the aim of moving towards a more digital, flexible company that is prepared for future challenges in a highly competitive context of profound transformation. This agreement will allow Telefónica, among other things, to continue its commitment to attracting and retaining the best talent, invest in developing the differential capabilities of the workforce through reskilling and place the company at the forefront of new ways of working and work-life balance, based on the premises of autonomy, responsibility and contribution to results.

At the same time, it has been agreed to implement collective redundancies for a total of 3,421 workers, to which workers who reach the age of 56 or more in 2024 and have been with the company for more than 15 years may adhere.

However, targets have been set that may result in limits on membership in critical areas or additional redundancies in areas with greater functional surplus based on business reasons. The present value of the Plan’s expenditure is estimated at a provision of around €1.3 billion (pre-tax), with no cash impact. The average annual direct cost savings will be around €285 million from 2025 onwards. In any case, the impact on cash generation will be positive from 2024 as well as the capture of savings, as Telefónica estimates that the exit of employees will take place as early as 1Q24.

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.