Telefonica to Spend EUR1.6 Billion on Staff Program, Reduce Workforce

   By Kim Richters and Pietro Lombardi 
 

Telefonica SA (TEF.MC) said Tuesday that it plans a 1.6 billion euro ($1.77 billion) staffing overhaul aimed at reducing its workforce and helping the Spanish telecoms company save on costs in Spain.

The plan, which the company's Spanish operation Telefonica Espana will submit to trade unions, is aimed at adapting its workforce "to the challenges of the coming years," with training programs for staff as well as individual suspension offers for employees over the age of 53.

Workers who decide to participate in the suspension plan maintain a relationship with the company and receive a lower salary until they can retire.

It is estimated that up to around 5,000 workers may meet the requirement for the suspension plan, which is voluntary, a spokeswoman for the company said. Roughly 6,000 employees could participate in retraining.

The plan's specific conditions are subject to the development of the negotiations with the trade unions on Wednesday.

The company said the plan will lead to the run rate of savings in direct expenses of around EUR220 million from 2021.

Separately, Telefonica said it is considering measures to monetize some of its infrastructure assets over the next 12 months, with one option being to sell selected assets to its Telxius subsidiary. Telefonica also said it would aim to create synergies through potential sharing agreements with other local operators .

Excluding Telxius, Telefonica owns about 50,000 sites, which could generate estimated revenues of EUR830 million annually on a pro forma basis. More than 60% of these sites are in Spain, U.K., Germany and Brazil, it said.

Write to Kim Richters at [e-mail]

(END) Dow Jones Newswires

September 10, 2019 13:19 ET (17:19 GMT)

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