Telefonica looks to shed over-50s in new redundancy plan

Telefonica is reportedly looking to lose around 3,000 staff from its payroll in Spain by offering a new redundancy plan to employees of a certain age and career longevity.

The Unión General de Trabajadores (UGT), or General Workers Union, told Reuters the Spanish operator plans to offer a voluntary redundancy package to staff born before 1967 and with at least 15 years of employment at the firm. The deal could cover as many as 3,261 members of staff, but Telefonica will limit uptake to 60%.

UGT representative Diego Gallart told the newswire that most of the redundancies will come in network deployment, maintenance and basic customer service roles, while departments focused on cybersecurity, marketing and artificial intelligence will be largely unaffected.

His comments once again raise the question of the human cost of digital transformation at telecoms operators. The increase in automation in network operations and maintenance naturally means telcos need fewer staff in those areas. It’s not too much of a stretch to suggest that this is what’s going on here.

Two years ago Telefonica embarked on a €1.6 billion plan to reskill its workforce in Spain as part of a move towards greater digitalisation of processes. The telco made much of the fact that it would involve 6,000 employees in reskilling initiatives in areas including security, robotisation, analytics, web development, business consulting, IT and Agile methodology capabilities, but the scheme wasn’t just about new skills; it also included an early retirement or redundancy offer for workers over the age of 53, an offer that was ultimately agreed with the trade unions.

Workers born in 1967 or earlier would be 54 this year, thus this latest initiative is along much the same lines. However, according to the Reuters report, it might prove less tempting to the eligible employees.

“It’s hard to say whether uptake will be in line with previous averages of 70% because the more senior staff are being presented with worse conditions than in past packages and may not find the current one appealing,” Gallart said, without elaborating on the conditions themselves.

Apparently Telefonica is locked in ongoing negotiations with the unions in Spain on this one.

It’s hardly surprising that the telco is looking to trim its domestic employee cost base though, given the difficulties it and others are facing in the market.

Spain dragged down Telefonica’s group results in the third quarter of this year, while Orange’s latest numbers also showed weakness in Spain, and Vodafone reminded us of the impact of the intense competition there, primarily in the mobile market. And all three of Spain’s big operators have embarked on staff-reduction plans in the past few months.

The telcos need to shed staff to keep costs down, that much is clear. But as for whether there will be a hiring frenzy if and when the competitive situation improves… Seems doubtful, doesn’t it?