Spanish telecommunications giant Telefonica SA is set to cut 5,500 jobs at a cost of $2.9 billion as part of a sweeping cost-reduction plan, Bloomberg reported on Monday.
The company, in a regulatory filing, reportedly said that it had signed an agreement with unions to implement exit plans for around 5,500 employees, which would would lead to annual savings of over $700 million.
"An agreement was reached with the trade unions... concerning the implementation of a voluntary departure plan for approximately 5,500 workers," Telefonica was quoted as saying by AFP.
Given that Telefonica's talks were with Spanish unions, it is understood that the job cuts are likely to impact Spain primarily.
Employees affected are expected to exit beginning early next year, with the company projecting a positive impact on cash generation from 2026 itself.
The move to cut jobs comes after the Telefonica chairman Marc Murtra last month outlined the carrier's plans to cut down on operating expenses after trimming its cash flow outlook for 2025 and halving its dividend.
Shares of Telefonica have declined 14% this year, and are currently trading at their lowest level since 2022, reported Bloomberg.
The last major Telefonica layoff took place in 2023, when the carrier cut 3,421 jobs in Spain, around 16% of its workforce.
In Spain, Telefonica currently employs around 25,000 people. The company's global workforce, meanwhile, is about 100,000 people, as per AFP.
Established in 1924 in Madrid under a different name, Telefonica is currently among the world's largest network providers, and boasts a presence in Spain, Germany, the United Kingdom, and Brazil.
Group subsidiary Telefonica Hispanoamerica, meanwhile, handles operations in Chile, Colombia, Mexico, and Venezuela.
While announcing the cost-cutting plan last month, Murtra had reportedly indicated a greater focus on Telefonica's core markets of Spain, Germany, Brazil and the UK going forward.