Spanish telecom giant Telefonica is the latest business to join the long list of organizations that have resorted to layoffs this year. The company is expected to cut 7,000 jobs by the end of the year, although the number could be brought down to 6,000 following negotiations with the union. According to Reuters, a spokesperson said, “multiple analyses are being carried out in all areas of the company, but there are no plans for a redundancy programme at this time.” This leaves us with a more conflicting image of the situation.
In November, Telefonica is expected to present its new strategic plans under the newly elected executive Chair, Marc Murta, following which the union will be informed of the decisions and updated on the exact extent of Telefonica’s staff reduction ambitions. Following negotiations, cuts will be made by December 31.
WHAT DO WE KNOW ABOUT THE TELEFONICA STAFF REDUCTION STRATEGY?
Telefonica currently has a global workforce of over 100,000 workers, which would make the expected cuts of 6,000-7,000 workers approximately 6-7% of its headcount. The reports suggest that the majority of the cuts will occur within the Spanish business, with mentions of Telefonica Moviles, its mobile and broadband business in Spain, and Telefonica Soluciones, which handles IT responsibilities.
Telefonica’s redundancy plan could be similar to the strategy implemented in 2024, where the organization looked for employees who would voluntarily leave, particularly those aged 55 and above. Employees from the corporate center, who were previously unaffected by cuts, could be affected by Telefonica’s latest round of layoffs.
WHY IS TELEFONICA EXPLORING JOB CUTS IN 2025?
Telefonica’s decision to cut down on its workforce has been linked to a desire to improve its profit margins and reduce its net debt of €27 billion. If things go smoothly during union negotiations, Telefonica’s restructuring news could revive some of the market’s faith in its capabilities. There could be a distant link between a desire for greater AI investments and layoffs. The company’s success with the tech is apparent in its data unit LUCA and generative AI platform Kernel.
According to the company website, the “technology company currently has more than 400 professionals dedicated to the research, development, and application of artificial intelligence use cases for customers (public and private) in multiple sectors of activity,” which shows its advanced integration of the technology across its services.
Instead of the typical AI-first approach, Telefonica’s AI strategy still maintains a people-first solution, leading with its own experts rather than relying on the tools to be its greatest strength, which is where the company stands out.
That said, while the company hasn’t linked the layoffs to AI or its technological advancements following the completion of its new fiber-optics infrastructure, there could be a connection to be found here. For now, we’ll have to wait for Telefonica’s strategy plan in November to better understand how the layoffs will proceed.
Source – https://www.thehrdigest.com/telefonica-layoffs-announced-as-plans-to-cut-6000-roles-surface/