Job cuts at Telefónica Deutschland could prove significantly more extensive than publicly disclosed so far. Internally, the mobile operator is apparently planning to reduce its workforce in Germany by around 1,650 full-time positions by the end of 2028. To date, the official announcement has covered the elimination of up to 1,100 jobs in 2026. Internal plans include the loss of approximately 550 additional positions in 2027 and 2028, though these have not yet been finalized. These measures are driven by declining revenues, the loss of major client 1&1, and a comprehensive restructuring of the German business. In addition, the company is increasingly relying on artificial intelligence and scaling back its sales, customer service, and retail store network.
Telefónica Deutschland could cut nearly one in four full-time jobs
At the beginning of 2026, Telefónica had around 6,820 full-time positions in Germany. If 1,650 jobs were indeed eliminated, the workforce would shrink by approximately 24 percent from that baseline. Mathematically, this would mean nearly one in four full-time jobs would be affected. However, the first phase of the program—which has already been approved—is set to be implemented primarily through voluntary severance offers.
Image: Shutterstock
According to internal plans, the second round of cost-cutting measures extends through the end of 2028. Around 170 full-time positions are set to be eliminated in customer service alone in 2026. An additional 180 jobs could potentially be cut in that department over the following two years. While Telefónica Deutschland confirms further adjustments in sales and customer service, it has not yet specified a concrete total figure for this second phase.
Loss of 1&1 business weighs on German operations
A key reason for the cutbacks lies in the company’s former business relationship with 1&1. For a long time, around twelve million of the competitor’s mobile customers used the O2 network in Germany, generating substantial wholesale fees for Telefónica. However, 1&1 is now migrating its customers to Vodafone and, increasingly, to its own mobile network. As a result, Telefónica Deutschland is losing a significant revenue stream.
The impact is already visible in the financial results. In the second quarter of 2026, revenue from the German business fell by 11.1 percent year-on-year to approximately €1.8 billion. Adjusted operating profit also declined by 7.2 percent to around €600 million. However, Telefónica expects the negative impact of the 1&1 situation to gradually taper off as the year progresses.
Telefónica reduces store count and leans more heavily on AI
The restructuring is not limited to administrative jobs; Telefónica Germany also plans to close around 60 of its own O2 stores. The entire network currently comprises approximately 800 company-owned branches and partner locations. At the same time, the company is shifting more sales activity online and automating internal processes.
Telefónica Germany has set aside provisions totaling 265 million euros for the first phase of restructuring. Further measures could incur additional costs of up to 155 million euros. Internal documents put the total restructuring costs at around 427 million euros. These measures are expected to generate annual savings of approximately 185 million euros starting in 2028. The trade union Verdi has criticized the cutbacks, while the company justifies the restructuring by citing the need for more efficient structures and increased digitalization.
Author: Blackout News
Sources: Handelsblatt (14.08.26) – Business Insider (14.08.26) – DCD (23.07.26) – Telefonica (22.07.26)