Telefonica has taken an upfront charge of EUR 2.9 billion to offer its workers an early retirement plan, according to a filing with Spanish market regulator CNMV. The operator said the charge will be reported as part of its fourth-quarter results, but will result in long-term cost savings. “The estimated run rate of savings in direct expenses is approximately EUR 370 million from year two,” said the company, adding that “the impact of these measures on Telefonica's cash generation is positive from the first year."
Telefonica said some employees will have immediate access to the voluntary plan, which is “wholly backed by the largest trade unions.” The announcement comes after the company revealed at the end of last year that it had reached a deal with Spanish trade unions for the period 2015-2017 encompassing all three of the company’s units in Spain – Telefonica de Espana, Telefonica Moviles and Telefonica Soluciones – and affecting a total of around 26,000 of its employees. The agreement included the right to take up voluntary redundancy from the age of 53 and a guaranteed wage increase of 4 percent plus bonuses amounting to EUR 1,000 over the next three years.
