The three most representative unions of Telefónica -UGT, CC OO and Sumados-Fetico- will facilitate a rapid agreement with the management on the new employment regulation file (ERE) that the company will propose in the meeting to which they have been called next Monday, 17. Although the union representation does not yet know the exact scope of the adjustment nor its conditions, both parties have maintained several informal contacts and believe that it is necessary to reach an agreement as quickly as possible. In this context, management and unions agree on the priority of accelerating the legal deadlines to seal the adjustment by the end of 2025 and have agreed on a timetable ad hoc to make this possible, sources informed of the matter informed EL PAÍS.
According to Spanish labor legislation, after the company communicates its intention to create an ERE, a period of 15 days opens to establish the negotiating table; Once that period expires, management and worker representatives have another 30-day period to negotiate the final number of departures and economic conditions. In this way, next Monday, the 17th, the process would begin and, by speeding up the process by a maximum of a month and a half, it would arrive in time for signature by 31 December 2025 or in the first days of January 2026, the same sources report.
The design of the regulation is very similar to the one applied in the last ERE. Then, on December 4, 2023, the company announced an adjustment for 5,124 workers, and after less than a month of negotiations, the ERE was signed on January 4, 2024, improving initial conditions and reducing departures to 3,421. The majority of the compliance cost, amounting to 1,300 million euros, was allocated to the fourth quarter of 2023. The company, then chaired by José María Álvarez-Pallete, wanted with this accounting maneuver to group the provisions for the ERE with those made due to the strong deterioration of the goodwill of its subsidiary in the United Kingdom, and to leave the 2024 balance sheet clean. As a result, the group presented losses overall in the 2023 for 892 million euros, which were reduced to 48 million in 2024.
In this case, the company chaired by Marc Murtra wants to spread the cost of the ERE in the current fiscal year, in which Telefónica has already accumulated net losses of 1,080 million euros until the end of September, due to the capital losses caused by the sale of several branches in Latin America (Argentina, Ecuador, Uruguay, Peru and Colombia). In this way the red numbers would be concentrated in 2025, leaving the 2026 budget clean.
Regarding the scope of the adjustment, the initial starting figure is estimated at around 6,000 workers (some minority unions extend it to 7,000) but, as happened in the 2024 ERE, the number will be significantly reduced during the negotiations. At Monday’s meeting the company will not provide data on exits and will simply communicate to the union representatives its intention to start an adjustment process. The number of outputs that will be brought to the negotiating table will be defined in the next few days, the cited sources report.
But more than the number of layoffs, the unions are more concerned with ensuring an improvement in economic conditions from the start. It should be remembered that in the last ERE the requests (3,640 applications for 3,421 places) were higher than the agreed limit of departures due to the attractive conditions agreed. This time the union’s task is to equalize or even improve the compensation and early retirement plans of the workers who benefit from them.
The climate of consensus between the three large unions called to discuss is absolute and there is full harmony with the company’s management, with whom the first corporate social framework was concluded last October. This agreement makes it possible to unify the rights and commitments of the workers of the entire group in Spain, regardless of the agreement applicable to each worker. A clause that facilitates the extension of the ERE to other group employees in Spain in addition to the three main subsidiaries (Telefónica España, Móviles and Soluciones) to which the latest adjustment has been applied. UGT, CC OO and Fetico signed the previous ERE of 2024, which was opposed only by minority unions such as CGT and USO.
Cost savings
The interests of the company coincide with those of the unions, although for different reasons. The presentation of the 2026-2030 Strategic Plan on the 4th was poorly received by investment firms, who considered the cash generation and debt reduction objectives insufficient or poorly defined. The price was affected and in the following days the company lost up to 16% of its value. Management believes that this stock market reaction is short-term and that the plan proposes painful but plausible measures to secure the operator’s future.
One of those measures envisaged by the Plan Transform and grow is the ambitious cost reduction objective, from 2,300 million euros by 2028 to 3,000 million in 2030. The savings also include items related to personnel, as admitted by the group’s CEO, Emilio Gayo. An agreement with the unions for the creation of an ERE would guarantee annual savings of between 300 and 500 million euros, depending on its size. And it would convey to the market Murtra’s firm desire to maintain his commitment to financial discipline.
In the last ERE in 2024, an average of around 380 thousand euros per worker was paid, a figure lower than the exit plans undertaken by the company in recent years. And the average savings for the company was around 285 million euros per year.
Furthermore, the inclusion of the ERE in the 2025 budget will be excellent news for Telefónica shareholders, who will not be affected by the dividend they will receive in the coming years. The reason is that, as reported by EL PAÍS, the 2026-2030 Strategic Plan establishes “commitments to employees” as one of the indicators that will be used to set the dividend starting from 2027. Under this “commitments” heading are included the compensation and annual payments received by workers who have left the company in the various ERE or voluntary exit plans.
The dividends charged in 2025 and 2026 are already guaranteed at 0.30 and 0.15 euros per share respectively. And it is not foreseeable that the company will face another labor adjustment in subsequent years, thus leaving open the cash flow calculation used to set the labor cost dividend of an ERE.
A long history of projects with voluntary departures and advantageous conditions
RM
The new ERE adds to a long list of adjustments that have reduced Telefónica’s workforce in Spain by almost 80% compared to what it had when it was still a public telecommunications monopoly. Only from 1997 (the year in which the privatization of the company was completed) to today, the company went from 67,000 employees in Spain to 18,305 workers with whom it closed in 2024.
The last ERE signed in January 2024 resulted in the exit of 3,421 workers aged 56 or over with fifteen years of seniority in the company. As regards economic conditions, those born in 1968 received 68% of the regulatory salary up to the age of 63 and 38% up to the age of 65; Those born in 1967, 1966, 1965 or 1964 received 62% of their salary up to 63 years of age and 34% up to 65 years of age, and a voluntary bonus of 10,000 euros for this section; those born in 1963 or earlier received 52% of their salary up to age 63 and 34% up to age 65, with the same voluntary bonus.
In the chapter on supplements, the ERE provided for the reversibility of income (in the event of death, the legitimate heirs will receive the residual income), the payment of the worker’s social security discount during unemployment and collective insurance up to 63 years (and up to 65 years for survival).
Previously, Telefónica applied an incentivized sick leave plan (PSI) in 2021 from which 2,418 workers benefited, at a cost of approximately 1,400 million euros. Subsequently, in 2019, it implemented another redundancy plan through which around 2,600 employees were separated from the operator, at a cost of 1.7 billion euros. The previous layoff plan dates back to 2015, which saw the exit of 6,300 workers at a cost of almost 3.7 billion euros. However, the most important change was made by César Alierta as president between 2011 and 2012, resulting in the departure of 6,800 workers and costing the company €2.7 billion.
