Telefonica Tech, the Spanish group’s digital services arm, is cutting about 6 percent of its workforce in a restructuring, Data Center Dynamics reported, the latest European telecom technology unit to shrink its way toward the cloud and security markets it can actually win.
The cuts fit the sector’s pattern: the tech services arms built by telecom groups in the last decade carry consulting headcount priced for growth that enterprise spending has not delivered, while the profitable work, managed security, cloud migration, sovereign and regulated industry platforms, needs fewer, scarcer skills. Restructuring charges now, margin later, is the standard promise, and investors have heard it from every incumbent in the sector.
For Telefonica the item sits inside a larger portfolio argument about what the group is for, an argument its data centre and tech assets keep being priced into by activists whether management invites the conversation or not.