O2 Telefónica Sheds 1,000 Roles as Revenue Falls and Key Client 1&1 Switches to Vodafone

German telecom O2 Telefónica slashes 1,000 jobs (1 in 6) after revenue fell 3.8% and profit slid 8.8%, driven by loss of wholesale client 1&1 and cost pressures from parent Telefónica.

The German telecom operator is eliminating roughly 1,000 positions – one in every six of its 6,820 employees – after a turbulent fiscal year that saw revenue drop 3.8% to €8.2 billion and operating profit slide 8.8% to €2.5 billion. The cuts, concentrated in customer service, the headquarters, and retail outlets, come on top of an existing voluntary severance program in the sales division.

A major catalyst was the loss of long-standing wholesale client 1&1, which is migrating about 12 million customers to Vodafone’s network by the end of 2025. That exodus hits O2 Telefónica hard in national roaming revenue, forcing the company to accelerate cost reductions. Most of the job losses are scheduled to be completed during 2026, with trade union ver.di estimating the savings at around €100 million.

Union secretary Christoph Heil did not hold back in his criticism, describing the plan as a pure cost-cutting exercise devoid of any coherent strategy. He pointed directly at the Spanish parent group Telefónica, arguing it is pressuring the German unit to deliver short-term savings rather than invest in long-term growth.

The management shake-up that began in late 2025 adds another layer of uncertainty. Santiago Argelich Hesse replaced Markus Haas as CEO, and the board was trimmed from seven to six members. Meanwhile, the domestic mobile market remains saturated, making it increasingly hard to attract new subscribers.

Shares in Telefónica’s parent company showed minor fluctuations after the announcement but stabilized during the trading session.