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HomeLatest NewsThe big European telecoms launch another wave of layoffs pending more mergers

The big European telecoms launch another wave of layoffs pending more mergers

Date: February 26, 2024 Time: 19:33:18

Telecommunications operators in Spain and Europe have been living a diet of losing weight for the last decade. Now a new wave of layoffs returns in the Old Continent waiting for the long-awaited consolidation of the sector to take place. The cuts announced by BT, Vodafone and Telecom Italia alone add up to nearly 70,000 departures, which will mainly take place in the next five years. In Spain, Telefónica executed its incentivized departure plan at the end of 2021 and the other two large companies carried out their EREs in the first part of last year. It remains to be seen how the merger of Orange and Másmóvil affects it.

The last big movement has been British Telecom in the United Kingdom. It is the former British monopoly and, like its counterparts in other large markets, has been downsizing as its rivals have gained market share. But the announcement he made last week is a step much further. It put 55,000 departures on the table until the year 2030. This represents 42% of its global workforce, including outsourced employees. It came as no surprise to the unions, who expected a significant reduction in employees due to the upgrade of the fixed network to fiber, the digitization of processes and the reduced need for labor for infrastructure maintenance.

There are more redundancy packages in the making at the large European operators which, contrary to what is happening with BT (which will concentrate the vast majority of departures in its home market), could affect Spain. This is the case of Vodafone. The company announced earlier this week a plan to “simplify” its structure with the reduction of 11,000 positions over the next three years. “Simplification will increase agility in our markets,” said the CEO, Margherita Della Valle. It was the same justification that the operator produced in the ERE that it carried out in Spain in 2022 of the levels set by the group of profitability in capital, among which was Spain. The cut will start in Germany, the United Kingdom and Italy.

The former Italian monopoly TIM, according to the Reuters news agency advanced a few weeks ago, was negotiating with the unions to carry out at least 2,000 layoffs in Italy in a voluntary departure plan. The goal was to try to “streamline” its domestic operations after years of intense trade battle. The Swedish Telia announced another 1,500 during this year, above what was initially planned (it has been cutting 1,000 jobs from its workforce since 2021). The reduction also extends to other relevant companies in the sector such as the Swedish network provider Ericsson, which announced in February a plan to eliminate 8,500 jobs (8% of the total) worldwide due to the reduction in demand for its services. . Given the slowdown in telecommunications investment, companies like Nordic or Nokia are seriously affected.

After years of heavy investment in network usage and technology upgrades, companies announced “optimizations” to improve their profitability, pushed down by stiff competition in major markets. The European Commission has promoted with its regulation that there should be at least four relevant operators with their own infrastructure, which has triggered the commercial battle between the contenders. This, together with the progressive ‘commoditization’ of these connectivity services, have cut the profit margins of these companies.

In Spain, Telefónica is the incumbent and the former monopoly. Since the mid-2000s, it has been completing downsizing as competition grew and market share fell. First he did it with Employment Regulation Files (ERE) and then with plans for incentivized departures (known by the acronym PSI). The last of these, which was the third since 2015, was agreed at the end of 2021, although it was definitively finalized in mid-2022. It involved 2,300 early retirements in this country, which left the staff of the three main subsidiaries is in the environment of the 18,000 workers. The staff are wondering if there will be new adjustments at the gates of the celebration of the group’s centenary, which will take place in 2024. For now, after the union elections that will be held in a few weeks, it will be necessary to address the potential extension of the collective agreement whose validity ends in December- or the approval of a new one.

After the labor adjustments experienced, the comparison of Telefónica with other of its counterparts in Europe points to the labor effort experienced in recent years. British giant BT closed last fiscal year with £20.7bn in revenue and a workforce of 100,000 employees, along with another 30,000 subcontractors. If only ‘direct’ workers are taken into account, it is just over 200,000 pounds per position (230,000 euros to change). The Spanish teleco closed the year 2022 with practically 40,000 million euros in revenue and a global workforce of 103,000 workers. The ratio is almost 390,000 euros, significantly above the British. Vodafone has around 100,000 workers and 45,000 million turnover (more than 400,000 euros per position). Orange’s comparison: it is above 330,000 euros.

The eyes in Spain are also placed on the merger between Orange and Másmóvil. The transaction, which is now being thoroughly studied by the European Commission for potential approval, is to be configured as a 50/50 joint venture. Internally, it is taken for granted that there will be duplication of positions, despite the fact that there is a ‘cold fusion’, which is what the main unions cling to. CCOO made an unusual movement last March: it requested by letter to the European authorities that they make maintenance of employment for at least eight years a condition for the ‘green light’.

Be that as it may, the three main operators in Spain assured at the end of last year that there were no plans on the table to execute massive layoffs during this 2023. They communicated it at a meeting organized by the UGT in November 2022. Since that date, the sit uation can change significantly. Not only because of the situation at Vodafone, which has put its division in Spain “under strategic review”, but also because of the rest. While in Spain there are still no movements, in Europe the wave continues to grow.

* 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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