Union warns O2 Telefónica job cuts could hit customer service

The Verdi trade union has criticized Spanish telecoms giant Telefónica over major job cuts that will see one in six jobs at its German O2 subsidiary cut.

The company said on Wednesday up to 1,100 full-time positions will be eliminated by the end of this year. In addition, the number of O2 shops - currently around 800 - is to fall by 60 by the end of the year, affecting company-owned locations rather than franchise partner sites.

Verdi union secretary Christoph Heil told dpa the measures could negatively impact the quality of customer service. 

In an ageing society, the need for advice on digital services and modern devices was increasing, he said.

"The cost-cutting measures are ill-timed. Personal advice in shops and on the phone is more important than ever. Instead of strengthening customer service and differentiating O2 from its competitors through the quality of its advice, the planned savings will weaken the excellent work of its employees." 

That could make it harder for O2 to retain existing customers and attract new ones, he said.

Heil, a member of the supervisory board of Telefónica Germany, believed the Spanish parent company had a responsibility to invest in its German subsidiary and make it competitive. 

Further cuts and cost reductions are planned for next year. The company said it intends to "further streamline the organization to meet requirements" by 2028, with the second round of cuts focusing primarily on call centres and sales. 

O2's core business is mobile. While the company also sells fixed-line internet contracts, it uses competitors' networks to do so, making fixed-line a secondary activity.

O2 Telefónica lost its biggest customer 1&1, which had used the O2 network for years and paid for the privilege. It has since switched its 12 million mobile customers to rival Vodafone, significantly reducing O2's revenues.

While rivals Deutsche Telekom and Vodafone have regained momentum, O2 continues to struggle in the German telecoms market.

Vodafone has already emerged from its restructuring phase, having cut around 3,000 jobs in Germany over the past three years, now employing just over 13,000 people in the country.