O2 Telefónica to cut over 1,000 jobs in Germany as Verdi slams 'pure savings programme'

Layoff plan

O2 Telefónica, Germany's second-largest mobile network operator and a subsidiary of Spain's Telefónica group, is planning to cut more than 1,000 of its 6,820 jobs in the country, roughly one in six positions. The company said it is examining "various measures" to safeguard long-term competitiveness but has not provided a detailed restructuring plan. According to people familiar with the matter, most of the reductions would be implemented still this year, condensing the programme into just a few months. The cuts affect a business that employs workers across Germany and is still absorbing the loss of its largest wholesale customer.

Union pushback

Verdi, the trade union representing service-sector workers, sharply criticised the move as a savings exercise dictated by the Spanish parent without a roadmap for the German operation. Christoph Heil, Verdi secretary and a member of Telefónica Deutschland's supervisory board, said the company has failed to present a target picture of its future shape or to communicate development goals for individual divisions.

There is still no target picture of the future company. Everything is to be turned upside down, but what exactly that means for employees is completely unclear.

Heil told the dpa news agency that the union fears the plan is solely a cost-cutting programme ordered by Madrid, with no precise idea of how the unit can grow again. The uncertainty, he said, is spreading through the workforce and the pace of the exercise, mostly this year, is "crazy speed".

We fear it is a pure savings programme ordered by the Spanish parent company without a precise plan for how the company can develop positively in Germany.

Loss of major client

The job reductions are directly linked to the abrupt loss of O2's biggest wholesale partner, 1&1. For years, 1&1 had paid to use O2's mobile network, but in 2024 it unexpectedly switched to Vodafone, and by the end of 2025 around 12 million mobile customers were migrated from O2 to Vodafone's infrastructure. The transfer caused O2's service revenues and operating profit to sink, forcing management to look for cost savings. Without that recurring revenue stream, the German unit is under acute pressure to shrink its fixed-cost base. The departure of 12 million wholesale customers dealt a severe blow to O2's top and bottom lines, and in a saturated market cost control became the most immediate lever to protect margins.

Struggling to monetise a better network

O2 has spent billions in recent years to improve its network and had narrowed the gap with market leader Deutsche Telekom. In December, according to the Bundesnetzagentur, O2's 4G network covered 88.6 percent of Germany's land area and its 5G footprint reached 76.2 percent. Telekom still leads with 92.5 percent 4G coverage, but the distance has shrunk considerably. Despite the network gains, turning those investments into revenue is difficult in Germany's saturated mobile market. Consumers consider good coverage a basic expectation and are reluctant to accept tariff increases. All three major operators are finding it hard to differentiate themselves, and the cost of further upgrades weighs on their margins.