(Clarifies comment on low-cost services in the first paragraph)
MADRID, May 14 (Reuters) – Orange’s Spanish subsidiary will cut its workforce by 485 people in the coming weeks, the company said on Friday, blaming the move on years of dwindling business in the country, a hyper-competitive telecommunications market in the one that low-cost companies have more and more weight.
France’s largest telecommunications company had already pointed out that cutthroat 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 competitors, Orange has faced growth problems despite the impact of the pandemic, while the sector, which has spent a lot on infrastructure such as fiber optic cabling, seeks funds to finance the deployment of 5G networks .
“The telecommunications sector has been experiencing loss of income for years as a result of the hyper-competitiveness of the market and the multiplicity of ‘low cost’ players,” a spokeswoman for Orange Spain said in a statement.
“This poses a great challenge for the company, which has been investing intensively for more than 20 years and needs to continue doing so in an environment of technological transition,” he added.
Orange noted that negotiations with the unions will begin in the next few days.
(Reporting by Clara-Laeila Laudette; edited by Nathan Allen and Jan Harvey, translated by Tomás Cobos)