Telefonica, Spain's biggest phone company, is putting a massive cost-cutting plan to its unions which could see more than a third of its Spanish staff lose their jobs by 2007. The company said that the move - which could see 15,000 posts disappear - was necessary to "guarantee the competitiveness of the company in the new telecommunications market environment".
It had already warned that the payroll of its fixed-line Spanish business would have to shrink to cope with the increasing challenge its rivals present.
Like many other telecoms companies across Europe, Telefonica lost its monopoly over fixed-line calls in the 1990s, and has seen its market share - and profit margins - shrink as a result.
At the same time, neighbouring Portugal Telecom - one of Portugal's biggest employers - announced its own plans to shed 1,500 fixed-line jobs, some 15% of the landline unit's staffing.
Job cuts begin at home
Telefonica is also a huge player in world telecoms, and is particularly strong in Latin America.
Aside from the fixed-line staff in Spain, the group includes more than 100,000 staff in mobile phone and internet services and overseas.
No job losses were announced among the group's other businesses.
Telefonica's performance has been weakened by the need to write down its investments in 3G phones.
In 2002, its losses were a record 5.6bn euros ($6.45bn; �3.9bn), although it reported a 534m euro profit in the first three months of 2003.
The announcement of the job cuts comes on the same day that Switzerland's main airline, Swiss, is planning to get rid of 3,000 of its 9,000 staff to cope with the continuing slump in the aviation business.
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