Telefónica and its labor unions have reached an agreement paving the way for a notable restructuring of the Spanish telecom giant. The deal, impacting seven of the company’s subsidiaries, secures a minimum of 4,539 voluntary job cuts-a reduction from the initially proposed 6,088 positions-and allows Telefónica to account for associated costs in its 2025 financial results. This move is a critical step in implementing the company’s new strategic plan as it navigates a competitive market and seeks to reduce its significant net debt.
Telefónica has reached an agreement with labor unions to proceed with a significant workforce reduction, impacting seven of its subsidiaries. The deal calls for a minimum of 4,539 job cuts across the affected companies, according to union sources – a reduction of approximately 25% from the initially proposed 6,088 positions.
The agreement allows the Spanish telecom giant to factor the costs associated with the restructuring into its 2025 financial results, clearing the way for the full implementation of its strategic plan in 2026. This move is being closely watched by investors as Telefónica seeks to streamline operations and improve profitability in a competitive market.
The bulk of the cuts, a minimum of 3,765 positions, will be concentrated within Telefónica’s core Spanish businesses: Telefónica España (2,925), Telefónica Móviles (720), and Telefónica Soluciones (120). Unions believe the agreed-upon numbers are sufficient to achieve a fully voluntary process, with the possibility of additional departures should more employees opt to participate. Conversely, if the minimum targets aren’t met, forced layoffs would become necessary, though unions currently anticipate this scenario is unlikely.
Historically, workforce reduction programs within Spain’s Ibex companies have seen higher-than-expected voluntary departures, suggesting Telefónica is well-positioned to meet its minimum requirements and avoid compulsory redundancies.
job cuts
Telefónica España will bear the largest share of the workforce reduction with this number of employee departures.
Beyond the three main subsidiaries, additional cuts will occur at Telefónica Global Solutions (112 employees), Innovación Digital (186), Telefónica SA (301), and Movistar Plus+ (175), bringing the total minimum across all seven companies to 4,539.
UGT, the largest union representing Telefónica workers, has announced its support for the agreement following weeks of negotiations. Sources indicate that CC.OO. and Sumados-Fetico are also expected to endorse the deal once their internal teams convene, though official confirmation is pending. “UGT has achieved the objectives it had set in the negotiation of the employment regulation files (ERE) within the Telefónica group, always defending the workforce, their rights and their working conditions. For this reason, the union endorses the results obtained and will proceed to sign the agreements,” the union stated.
The union emphasized that voluntary departures will be prioritized, primarily through early retirement packages. “Voluntary departures, which will also be carried out in the form of pre-retirement, guarantee that it is the workers who decide, and also allow them to maintain their purchasing power, preserve their standard of living and continue contributing to the generation of wealth in local economies. In addition, the special contribution agreement ensures contributions to Social Security, contributing to the sustainability of the public pension system,” UGT added. For those not eligible for early retirement, unions say they have secured a compensation package that exceeds industry standards, along with a voluntary incentive to support employees seeking new professional opportunities.
Telefónica aimed to finalize the agreement before year-end to account for ERE costs in its 2025 financials
In addition to the job cuts, the unions have secured an extension of collective bargaining agreements through 2030. UGT, CC.OO., and Sumados-Fetico made this extension a key demand, aligning the agreements with the timeline of the company’s new strategic plan. “This achievement is a resounding success of the union strategy: not only are working conditions maintained, but the salary revisions that protect purchasing power, as well as the 36-hour work week, are also extended to all agreements, marking a true milestone in Spanish companies,” UGT highlighted.
Strategic Plan
With the ERE now settled, Telefónica, under the leadership of Marc Murtra, can focus on implementing the operational measures outlined in its new strategic plan. Beyond streamlining its structure, the market is keenly anticipating potential transactions and the company’s planned exit from Latin America.
A withdrawal from Latin America, including Venezuela, with the exception of Brazil – a priority market – is widely expected in 2026. The company had already begun reducing its presence in the region under previous leadership, and Murtra’s arrival has accelerated those plans.
More challenging will be the mergers and acquisitions Telefónica is pursuing in its key markets: Spain, Brazil, Germany, and the United Kingdom. The group is currently in discussions with competitors in each of these markets, with the intention, as reported by ABC, of announcing deals in the first half of 2026.
