O2 Telefónica Job Cuts: 1,000 Jobs Affected

In recent years, the company had already cut positions or encouraged employees to leave voluntarily through severance packages. In initial business divisions, agreements have already been reached that allow employees to leave the company voluntarily in exchange for severance. In parallel, the management board is being reduced from seven to six positions.

Economic Situation and Transformation

The job cuts come against the backdrop of a significant deterioration in business figures. Adjusted operating earnings (EBITDA) slumped by 8.8 percent to 2.5 billion euros. The company justifies the move with a comprehensive transformation intended to secure long-term competitiveness.

A spokesperson for O2 Telefónica stated that the company is undergoing an extensive transformation process. "Im Rahmen dieses Prozesses prüfen und beraten wir gemeinsam mit den Arbeitnehmervertretungen verschiedene Maßnahmen", the company said. "Fest steht bislang lediglich, dass die Veränderungen mit hoher Geschwindigkeit vorangetrieben werden und wesentliche Maßnahmen bereits im Laufe dieses Jahres umgesetzt werden sollen."

At the same time, it is becoming apparent that the transformation process will extend well beyond 2026. Management considers the personnel cuts unavoidable. "Das sei unumgänglich", management emphasized. Telefónica Deutschland had informed the workforce about the far-reaching cuts as part of the "Future Operating Model" (FOM) project.

Adding to the economic burden, according to information from the Verdi trade union, employees of Telefónica Deutschland had for a long time generated annual dividends of at least 500 million euros. Employees themselves had on average absorbed a real wage loss of around 4.5 percent since 2018 due to low pay increases, as Verdi criticized.

Market Environment and Competition

In December, O2 reached 88.6 percent of Germany's surface area with its 4G network and 76.2 percent with 5G, according to figures from the Federal Network Agency. This put O2 behind Telekom (92.5 percent) in 4G coverage, but slightly ahead of Vodafone (91.7 percent). In 5G, O2 achieved slightly higher surface coverage than Vodafone (75.7 percent), while Telekom reached 87.9 percent.

Competitive pressure on O2 Telefónica has intensified noticeably in recent years. By the end of 2025, around 12 million mobile customers had switched from the O2 network to the Vodafone network. In 2024, the wholesale customer 1&1 had also surprisingly switched to competitor Vodafone, depriving O2 of additional revenue.

Leadership Change

O2 has around 18 million mobile contract customers, plus prepaid cards and partner business. Unlike Telekom or Vodafone, O2 does not operate its own fixed-line cable network and must pay competitors for fixed-line connections. This makes the company dependent on partnerships in this segment.

There has just recently been a change at the top of the company. His successor, the German-Spanish Santiago Argelich Hesse, took over as CEO from Markus Haas. The new boss now faces the task of implementing the restructuring in a phase of declining earnings and growing competition.

Verdi Trade Union Response

The Verdi trade union reacted sharply to the announced plans. Verdi described the planned cuts in a communication to its members as "Kahlschlag". "Laut Bundesnetzagentur" the network operators achieved different coverage levels, illustrating the providers' operating conditions. Christoph Heil, Verdi secretary and Telefónica supervisory board member, announced the upcoming job cuts and spoke of massive job losses.

Remaining employees must expect an increasing workload, according to the union's assessment. The workload is being distributed across fewer shoulders, while uncertainty remains about Telefónica's future. Verdi is therefore demanding binding regulations to protect the remaining employees.

Industry Comparison and Outlook

The group management points to comparable steps taken by competitors. What Vodafone has been through, competitor O2 Telefónica now faces. Vodafone had cut around 3,000 positions over three years and currently still employs just over 13,000 people in Germany. The German mobile market is considered saturated, with no significant growth in sight.

At the same time, providers are marketing more generous data volumes to their customers without raising prices. This too continues to pressure the network operators' margins. O2 had most recently run a campaign promoting its network: "Das miese O2 Netz ist auch nicht mehr das, was es mal war", was the slogan with which the company sought to win trust.

Initial information about the planned cuts had previously been published by "teltarif.de". From Verdi members' circles, it was said the loss of jobs would be massive. Telefónica Deutschland is one of the largest mobile providers in Germany and is the German subsidiary of the Spanish Telefónica Group.