Telefónica has recently formalized an employment regulation file (ERE) in partnership with major unions UGT, CCOO, and Fetico-Sumados. This agreement will impact seven subsidiaries and outlines a minimum of 4,525 employee departures—14 less than originally anticipated due to last-minute adjustments in some divisions such as Telefónica Global Solutions, Telefónica Innovación Digital, and Telefónica SA.
Fewer Layoffs Than Expected
The agreement reached signifies a notable 25.6% reduction compared to the initial figure of 6,088 proposed layoffs. This figure only represents a minimum estimate, as Telefónica projects around 5,500 employees may opt for voluntary exits. This development indicates a lesser impact than previously announced.
Of the planned layoffs, a significant portion will stem from companies associated with the Related Companies Agreement (CEV), estimating at least 3,765 departures. This includes 2,925 layoffs from Telefónica de España, which constitutes nearly 33% of its workforce, as well as 720 from Telefónica Móviles and 120 from Telefónica Soluciones.
Economic Conditions and Membership Requirements
Compensation packages vary based on workers’ birth years. Employees born between 1969 and 1971 will receive 68% of their regulatory salary until age 63 and 38% thereafter. Older workers (1965-1968) will get 62% until 63 and 34% thereafter, while those born in 1964 or earlier will secure 52% up to age 63 and 35% afterward.
Eligibility for voluntary departures requires a minimum of 15 years’ seniority for related subsidiaries and 13 years for global subsidiaries. Notably, employees in global divisions can benefit from bonuses ranging from €5,000 to €18,000, which are twice the initially discussed amounts.
Staggered Departure Process
The departure timeline will vary by subsidiary. For related subsidiaries, the application window will run from December 29 to January 26, whereas for global subsidiaries, it will extend to January 29. Movistar+’s application period begins on January 7 and concludes on February 6.
Spend to Save
Telefónica estimates that the ERE will cost approximately €2.5 billion before taxes, with around €2.3 billion earmarked for Telefónica España and Movistar Plus+. These job cuts play a crucial role in the company’s Transform & Grow strategic plan for 2026-2030, aimed at achieving annual savings of up to €3 billion by 2030. Notably, they predict an annual savings of about €600 million starting in 2028.
In conjunction with the ERE, Telefónica has sustained collective agreements with unions until 2030, committing to a 1.5% annual salary increase. Employees in associated subsidiaries will also receive a one-time additional payment of €300 in October, and significant benefits enhancements. These include the extension of teleworking policies, improvements in bank guarantees for home purchases, and non-working holidays on December 24 and 31.