Telefonica to axe 1,600 jobs in Germany

Jobs to be cut to rid the company of "duplicate functions” in wake of €8.6bn acquisition of E-Plus.
Written by Michael Filtz, Contributor

Telefonica Deutschland announced last week that it will be cutting 1,600 jobs in Germany, just weeks after it closed the €8.6bn acquisition of KPN's German mobile network E-Plus.

Telefonica says that the move is necessary to "abolish duplicate functions", according to a statement from the company.

The cuts represent almost 18 percent of the merged company's 9,100 full-time staff in Germany, and will come from both E-Plus and Telefonica's German O2 network. The cuts will be completed by 2018.

German labour union Verdi union rejected the cuts. "The proposed radical cuts may come at the expense of the workers and the quality of service, and is therefore unacceptable," a spokesperson for the union said.

The cuts, according to the spokesperson, will "dramatically increase employee workload and pressure to perform".

In July, when regulatory approval for the acquisition was still under way, Verdi had warned that the merger would put a significant number of jobs at risk, and called for union representation in the merged company.

Telefonica said that negotiations are still ongoing, but that in any event, E-Plus' Düsseldorf headquarters will continue to play an important role in the merged organisation. Additionally, Telefonica intends to provide severance packages for departing employees, although the company provided no further details.

Earlier this month, Telefonica, after over a year of negotiations and concessions to regulators, closed the acquisition of E-Plus. To secure approval from the European Commission’s antitrust office, it had to agree to initially sell off 20 percent of the combined network capacity to Drillisch, a mobile virtual network operator. Another 10 percent is still on the table if Drillisch wants to acquire it in the future.

With Telefonica’s acquisition of E-Plus, the company is set to serve some 47 million customers in Germany, or some 31 percent of the mobile market, which is comparable to the market share of each of its main competitors, T-Mobile and Vodafone.

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