MADRID (Reuters) – Orange’s Spanish business will lay off up to 485 employees in the coming weeks, the company said on Friday, citing years of shrinking income amid Spain’s hypercompetitive and increasingly low-cost telecommunications sector.
France’s biggest telecoms firm had already signalled that ruthless competition in Spain – its second-largest market – was a long-term trend in the region after posting worse-than-expected results in the first quarter.
Like its European rivals, Orange has been facing growth issues separate from the pandemic’s impact as the sector, which has spent extensively on infrastructure such as fibre-optic cabling, scrambles to fund its upgrade to next-generation 5G networks.
“The telecommunications sector has spent years enduring revenue loss as a consequence of the hypercompetitivity of the market and the multiplicity of low-cost actors,” a spokeswoman for Orange Spain said in a statement.
“This (context) is a huge challenge for the company, which has shouldered intensive investments in the past 20 years and needs to keep doing so amid the technological transition.”
Adapting operations by reducing the workforce will be essential to ensuring Orange’s competitiveness in the face of structural changes, the statement added, noting that negotiations with labour unions would begin in the next few days.
(Reporting by Clara-Laeila Laudette; Editing by Nathan Allen and Jan Harvey)
