Telefónica's German subsidiary plans to cut 1,000 jobs amid transformation

Telefónica's German subsidiary, which operates under the O2 brand, is planning to cut approximately 1,000 jobs, representing nearly 15% of its workforce of over 6,800 employees, according to German media reports. The company has confirmed it is in talks with worker representatives as part of a broader transformation plan.

The proposed cuts

Multiple outlets report that the layoffs would affect about 1,000 of the 6,800 employees Source: La Vanguardia. Telefónica Deutschland stated it is "inmersed in a comprehensive transformation" to ensure long-term competitiveness and viability, but declined to comment on specific measures, impacts, or timetables, citing respect for ongoing negotiations Source: Infobae, El Confidencial.

Financial pressures

The job cuts are partly driven by the loss of a major wholesale contract with rival 1&1, which ended its network leasing agreement with O2 and migrated approximately 12 million mobile lines to Vodafone Source: El Confidencial. This contributed to a 3.8% drop in annual revenue to €8.2 billion and an 8.8% decline in EBITDA to €2.5 billion, as reported by Handelsblatt Source: Infobae. The company also faces challenges in its fixed-line business, which relies on leased access from other operators Source: El Español.

Market context

The German telecom sector is struggling with saturated markets and rising data volumes without corresponding price increases. Vodafone Germany has cut around 3,000 jobs in recent years, and Deutsche Telekom has reduced its workforce through early retirement schemes Source: El Español. Since taking over as CEO in late 2025, Santiago Argelich has reduced the board from seven to six members and launched a transformation plan Source: La Vanguardia.