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HomeLatest NewsTelefónica's ERE culminates twelve years of cuts in telecoms with 22,000 departures

Telefónica’s ERE culminates twelve years of cuts in telecoms with 22,000 departures

Date: February 29, 2024 Time: 14:08:28

Negotiation begins on Telefónica’s first Employment Regulation File (ERE) since 2011. The constitution of the three dialogue tables marks the beginning of the countdown to find out the condition and conditions under the pressure of a new one with Venio and the need for social peace at the gates of the centenary. This collective dismissal, which could affect between 2,500 and 3,000 workers, culminates twelve years of job cuts in the telecommunications sector with more than 22,000 departures between ERE and incentivized leave plans without termination.

PRECISELY IN THAT FAR AWAY 2011, WITH THE FINANCIAL CRISIS SLAPPING THE SPANISH ECONOMY AND WITH THE PRICE WAR, THE MOBILE FIELD HITTING THE COSTS OF THE THANTASIDIDIDID A by José María álvarez-Pallete, THIS PERIOD OF CUTS WAS BEGINNING. This ERE, which involved 6,830 dismissals, entailed a cost of 2.7 billion euros and was a turning point for the Government, which stood up and pressured until the money for unemployment benefits came out of the company’s coffers. Since that date, the company has carried out three other incentivized cancellation plans: one in 2015 with 6,300 departures; another in 2019, with 2,630, and the last in 2021, with 3,247.

The one now being negotiated would be the fifth for the old monopoly. Telefónica is no exception. The vast majority of incumbent operators in Europe, such as BT or Deutsche Telekom, have carried out heavy staff cuts since the privatizations completed in the mid-1990s. The progressive loss of market share in favor of their rivals and the strong competition in price of the sector are among the factors indicated in Spain. In these four previous programs, the conditions have been similar in the fine print, although the trend has been worse. The key was in 2021 when a red line was crossed: the door to the veto was opened, when universality and voluntariness were key principles.

Its rivals in Spain have also chosen to take out the scissors in the face of this decade of strong competition and progressive reduction in the income generated. The British Vodafone has been the one that has resorted the most to the ERE. In 2013, before it managed to complete the controversial acquisition of the ONO cable company for 7.2 billion euros, it already put on the table one that involved 750 departures (130 of them outsourcing) and 150 modifications to working conditions. This was the first of several. Then came 2015, to digest the acquisition, which totaled 1,059 departures, where early retirements were also offered (with 80% of the regulatory net salary up to 61, 63 and 65 years depending on the age of the employee).

Four years later, in 2019, the reasons alleged had to do with this shift to the ‘low cost’ of the market and the effects on its income statement – also impacted by the departure of football -. “The demand for services continues to grow exponentially and prices do not,” said the then CEO, Antonio Coimbra. One million employees left (the initial proposal was for 1,200) with a small package of early retirement and 50 days of compensation without total voluntariness. Two years later, just after the signed guarantee period, another group of 442 came out with another ERE with very similar conditions. Now, there is a certain fear in the squad of a potential fifth snip. Its future owner, the British fund Zegona, has already proposed “selective” exits and a cost adjustment.

Vodafone has carried out four collective redundancies since 2013 and Orange has approved two

In the case of Orange, collective dismissal has been resorted to on two occasions in these twelve years of activity. One was in 2016, precisely to face the integration of Jazztel, whose acquisition was announced in 2014 but required the regulatory ‘green light’. This ERE affected nearly half a million employees. At that time, compensation ranged from 57 to 62 days per year with no limit on monthly payments. To this we had to add early retirements for those over 55 years of age. Five years later, he pulled out the scissors again, also alleging the “hypercompetitiveness of the market” and the “multiplicity of ‘low cost’ actors.” 400 employees left here, just over 10% of the staff of the main Spanish subsidiary, with better conditions than the previous one.

Másmóvil is the exception in this sector. And it is despite the fear among the Euskaltel staff of a potential collective dismissal following the public acquisition offer (OPA) launched in 2021 for the Basque operator. The brochure ruled out any measure of this type but always linked it to “market conditions.” In the end, it has not been carried out, beyond the typical adjustments in the day-to-day life of these groups. The key now is what will happen after the merger between the holding company led by Meinrad Spenger and Orange. The first has just under 2,000 (1,800 at the end of 2022), while the French has around 6,600, among all areas.

Telefónica’s ERE, the Mirror

Orange and Másmóvil have insisted that there are no exit plans on the table for the ‘post-integration’ phase. The CEO of Orange Spain, Ludovic Pech, assured last October that the synergies promised with the joint venture have to do with the purely industrial aspect. He defended complementarity and lack of overlaps. But there is a lot of concern from the unions. In fact, CCOO met with representatives of the European Commission to convey their concern and demand that measures linked to employment stability for both groups be included.

Starting this Monday, all the rivals and their union representatives will look closely at what happens at the Las Tablas headquarters in Madrid. The negotiation of Telefónica’s ERE will represent a good thermometer for what may come in the first months of 2024, according to sources from social organizations. The big unknowns with which it starts have to do with voluntariness: there is some fear in the workforce that it will be forced to force the most veterans to leave, as well as the workers linked to the copper plants. Also with economic conditions and whether they will worsen compared to the last PSI (between 65% and 68% of gross income but with group social benefits and the possibility of early retirement at age 63). The countdown begins. There will be a response before January 4.

* This website provides news content gathered from various internet sources. It is crucial to understand that we are not responsible for the accuracy, completeness, or reliability of the information presented Read More

Puck Henry
Puck Henry
Puck Henry is an editor for ePrimefeed covering all types of news.
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