German telecoms operator Telefónica Deutschland will cut nearly a fifth of full-time jobs in a move aimed at achieving cost savings and abolishing duplicate roles following its €8.6bn takeover of E-Plus.
Telefónica Deutschland, which is controlled by Spain’s Telefónica, said it will eliminate 1,600 roles out of a total of 9,100 by 2018.
In a statement, Telefónica Deutschland said it would avoid compulsory redundancies “wherever possible” and that job reductions would not discriminate between employees of E-Plus and staff employed by Telefónica Deutschland before the takeover.
The German company said the planned measures shall contribute to achieving the announced synergies of more than €5bn.
Shares rose by 0.5 per cent on Friday to €3.59.
The merger between Telefónica Deutschland and E-Plus, Germany’s third and fourth biggest operators respectively, was widely seen as controversial for reducing competition.
The deal created Germany’s biggest mobile operator by customer numbers, ahead of Deutsche Telekom and Vodafone.
It was cleared by the European Commission after Telefónica Deutschland agreed to divest spectrum to smaller rivals.
Reductions are expected in sales and customer services, areas where the company plans collaboration with partners such as the German mobile provider Drillisch.
Telefónica sold network capacity to Drillisch in a deal that helped address regulators’ concerns over the consolidation of the German telecoms market.
Drillisch, a smaller carrier that does not own its own network, is also acquiring 50 shops from Telefónica Deutschland. This will be the first time that it has a high street presence.
European telecoms operators are eager to consolidate so they can make use of economies of scale to achieve savings and invest in faster networks.
Telefónica Deutschland said that customers are “rapidly moving” from voice-based telephones to mobile data services and that massive infrastructure investments were needed.
German chancellor Angela Merkel has pushed for an easing of restrictions on consolidation, saying that while China has just three big telecoms providers, the EU has 28.
But regulators fear that “four-to-three” mergers of major mobile operators are bad for competition.
German mobile prices are among the highest in Europe. In Austria, where a similar four-to-three consolidation took place, prices have gone up.
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