Spanish Telefonica guarantees its workers jobs until 2014

Telefonica has reached an agreement with workers to guarantee jobs and increase salaries until at least 2014.

Company contributions to staff pensions will be suspended for 15 months to achieve this, labour unions said.

Workers will be safe in their jobs until 2014 and salaries will rise 1 per cent this year and next, in line with a previous agreement, unions said. They added that the deal could be extended until 2015.

‘The Telefonica deal breaks away from the current trend both in the sector and the country, with companies totally unwilling to risk salary increases or make medium-term promises, which highlights how positive this agreement is,’ the CCOO and UGT unions said in a statement.

Telefonica said in 2011 that it would lay off 6,500 workers in Spain over three years. The company’s revenues dropped 13 per cent in 2012 as consumers got rid of their mobiles or switched to budget operators.

Rival Vodafone, also facing falling earnings in the recession-hit economy, has said that it will lay off 620 workers in Spain.

Spain’s unemployment rate has reached 26 per cent and some of the country’s biggest companies cut costs by continuing to lay off staff.

Meanwhile, the Caixabank has recently said that it plans to lay off 2,600 workers.