Telefónica Deutschland plans 1,600 job cuts after E-Plus merger

Telefónica Deutschland announced today that it intends to cut its workforce by around 1,600 full-time positions by 2018 as a result of the Germany-based company's recent merger with E-Plus.

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From the left: Thorsten Dirks, Rachel Empey and Markus Haas

According to a company statement, the measures have yet to be approved by the supervisory board. However, the company said the works council and management have agreed to cooperate "in a spirit of trust", and noted that the primary purpose of the cuts was to abolish duplicate functions.

Telefónica Deutschland said the plans to reduce the combined workforce from its current level of 9,100 employees--4,500 from E-Plus and 6,000 from Telefónica--formed part of efforts to achieve savings of around €5 billion.

It also insisted that the job reductions would not differentiate between the old Telefónica Deutschland and the former E-Plus Group, noting that the latter's Düsseldorf site will continue to have an important role in the company besides the registered head office in Munich.

Hamburg will continue to be the major location for the fixed-line business of Telefónica Deutschland.

"The goal is to use the merger as a springboard for the digital transformation of the business model," the company added.

Confirmation that the cuts would affect 1,600 positions and not more, as was reported earlier by some publications, might come as some small consolation.

Bloomberg had reported that the cuts could affect 1,800 staff, equating to around 20 per cent of the workforce.

Meanwhile German publication Manager Magazin said the cuts under new CEO Thorsten Dirks--the former CEO of E-Plus--could amount to almost 50 per cent of the workforce by 2018--much higher than had previously been expected.

The German publication noted that the cuts would primarily affect areas such as customer service and retail outlets, although new positions would be sought where possible, such as at new MVNO partner Drillisch. The IT department is also expected to suffer some staffing cuts.

The announcement on the planned job cuts comes just over two weeks after Telefónica Deutschland assumed the position as the leading mobile operator in Germany with 41 million subscriptions, after formally completing the acquisition of 100 per cent of E-Plus from KPN.

The new German operator has a total of 47 million fixed and mobile subscriptions and pro forma revenue of €7.9 billion (in 2013). The merger is also expected to produce synergies of around €5 billion. Dirks is also joined by Markus Haas as COO and Rachel Empey as CFO.

For more:
- see this Telefónica Deutschland statement
- see this Reuters article
- see this Bloomberg article
- see this Manager Magazin article (in German)

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