Telefónica's president, Marc Murtra, is considering a workforce reduction of between 4,000 and 5,000 employees in Spain as part of a strategic review aimed at cutting costs and improving efficiency. This potential adjustment would be implemented through an Expediente de Regulación de Empleo (ERE), a process similar to one agreed upon with unions in 2024 that resulted in the departure of 3,421 workers.
The Spanish government, through the Sociedad Estatal de Participaciones Industriales (SEPI), currently holds a 10% stake in Telefónica, having invested 2,284 million euros last year. This relationship marks a significant shift, as the government, typically opposed to large-scale layoffs, is now involved in the decision-making process regarding workforce adjustments.
According to El Confidencial, Murtra's proposed ERE is part of a broader strategy to enhance the company’s competitiveness not just in Spain but across Europe. He aims to present a new business plan in the second half of 2025, which will outline these changes in detail.
The current collective agreement guarantees employment conditions until December 31, 2026, which means that any layoffs must have the support of the major unions, including UGT, CC OO, and Sumados-Fetico. These unions have expressed their concerns, stating they have not received any official communication regarding the potential job cuts. They emphasize that the new leadership should focus on strengthening the workforce rather than making it a variable for adjustment.
In early 2024, Telefónica reached an agreement with unions for an ERE affecting 3,421 workers, costing around 1,300 million euros before taxes and expected to save approximately 285 million euros annually starting in 2025. The conditions for those affected included a percentage of their regulatory salary until they reached 63 or 65 years of age, depending on their birth year, alongside a voluntary exit bonus.
Murtra's approach appears to be a continuation of the cost-cutting measures initiated by his predecessor, José María Álvarez-Pallete, who oversaw significant workforce reductions during his tenure. Since 2008, Telefónica has reduced its workforce by nearly 20,000 employees through various plans, including individual separation plans (PSI) aimed at older workers.
While the specifics of Murtra's potential ERE remain unclear, it is expected that negotiations with the unions will lead to adjustments in the proposed numbers. The unions have indicated that any layoffs must be universal and voluntary, maintaining the same economic conditions as previous agreements.
In addition to the potential job cuts, Murtra is also considering reducing the remuneration of the board of directors, responding to shareholder demands for more reasonable compensation. In a recent shareholders' meeting, he acknowledged the need for financial discipline and simplification within the company.
On May 14, 2025, Murtra is set to present the first quarter results since taking over as president. Analysts expect the company to report significant losses due to provisions related to the sale of its Argentine subsidiary, which is projected to impact the financial statements by 1,107 million euros.
Despite the challenges, Murtra is committed to maintaining a “financial discipline of iron” and believes that improving operational efficiency is crucial for Telefónica's future. He has stated that the company must adapt to the rapidly changing telecommunications landscape and that large-scale companies are essential for fostering innovation and investment in new technologies.
The unions, however, remain cautious. UGT has stated that the arrival of the government as a shareholder should represent an opportunity to renew commitments and improve the strategic position of the workforce, rather than resorting to layoffs. They argue that the sustainability of a company like Telefónica must not be achieved through job cuts, especially given its strategic importance in Spain.
As the situation develops, the outcome of the negotiations between Telefónica and the unions will be critical in shaping the future of the company and its employees. The proposed ERE, if confirmed, will require careful management to balance the need for cost reductions with the commitment to maintain stable, quality employment.
In conclusion, the coming months will be pivotal for Telefónica as it navigates these potential changes. The company is under pressure to deliver both financial results and a clear strategic vision that respects the rights and conditions of its workforce while ensuring its competitiveness in the global telecommunications market.
