The collapse of income due to the rise of ‘low-cost’ in the sector leads Telefónica, Orange and Vodafone to launch new outlets
A new wave of departures elevates a more than 20,000 jobs lost among the top three telecommunications companies in the last decade, according to figures provided by the unions. This reduction in workforce -which includes the 442 departures from Vodafone, the 415 from Orange and the potential retirement plan that Telefónica is preparing to launch before the end of the year that could affect around 3,000 employees– is in line with the income drop of the three telecos in this period.
In 2020, the three main companies in the sector added a total turnover of 24,586 million euros, very similar to that of 2003, according to the National Markets and Competition Commission (CNMC). The covid It has made a dent in the sector, but the downward trend comes from far, with an average revenue of 30,000 million euros in recent years, compared to the maximum of 32,959 reached in 2008.
Telefónica It is the leading Spanish operator, the one with the largest workforce (18,248 people at the end of 2020, according to the CNMC) and also the one that has made the most cuts. The company he runs Emilio Gallo it reduced its workforce between 2011 and 2013 by a total of 6,830 workers; while between 2019 and 2020 it carried out adjustment plans that affected 8,500 employees.
Before the end of the year, the Movistar operator will carry out a new termination plan (PSI) that will affect a range of between 2,500 and 3,500 employees, in the absence of knowing the conditions. The company directed by Emilio Gallo on Friday transferred to the unions that will soon initiate contacts to achieve “a Social Pact that determines the future employment of the company.”
In case of Orange and Vodafone is not very different. Immersed in a brutal restructuring since she decided to stop broadcast football in the 2019 season Considering that it was not profitable, Vodafone has added more than 3,500 layoffs in recent years. The last one has just closed with the unions with the departure of 442 people. Before, Orange had closed an employment regulation file (ere) in June that affected a total of 415 employees, adding to 600 in 2008 and 496 in 2016.
The competitive pressure in Spain, driven by the rise of the ‘low cost’, is the main reason to which large companies allude to reduce their size. For both Telefónica and Vodafone, 2007 was the best year in the historical series in terms of revenue, with a turnover that exceeded 21,000 million and 7,000 million, respectively. As of 2008 (year in which MásMóvil began to be marketed in Spain) the billing of both companies has been reduced to more than 14,600 million and 4,800 million that each one has invoiced in 2020. In the case of Orange, the company has gone from being around 4,000 million in 2007 to 5,000 million on last year.
In the sector as a whole, revenue fell in 2020 by more than 3,000 million, but its effect on the workforce was not seen until this year. And that despite the fact that each time the use of telecommunications services is greater. Thus, if in 2004 there were 3.4 million fixed broadband services, 2020 closed with 16.1 million (in 2007 there were 8 million). In the case of mobile lines, in 2004 there were only 38.6 million, while in 2020 there are 55.6 million (in 2007 there were 48.4 million).
Al auge del ‘low cost’ In Spain, the change of era in telecommunications is added with the end of the development of fiber, especially in the case of Telefónica, since it has practically the entire country complete. As well as with the rise of digitization in all areas, from operations to commercialization. In this sense, the best example is Vodafone, which linked the layoffs it carried out this year in Spain to the closure of its 34 own stores in the country with the aim of creating an organization with which “to be more agile and competitive.”
Orange also plans to get rid of a good part of its stores, especially the smaller ones. The company now directed by Jean-François Fallacher announced a few days ago that it has already closed 40 stores out of a total of 800 stores that make up its commercial network and will continue to close those that are not profitable. “In a new situation in which digitization is gaining weight, we have to rethink the store model,” explained Diego Martínez, vice president of the group’s consumer division in Spain.