According to reports, Telefónica planed to lay off 5,000 people in Spain. The company said it planed to retrain 6,000 employees in areas such as security, robotics, analytics, web development, business consulting, IT, and “agile methodology capabilities.” As a result, the company doubled its training budget and increased training time per employee by 40%.

Reform is necessary because in the digital world, Spanish telephone companies still have too many simulator workers. The company expects digital channels to account for half of sales in the next few years, and many customers will prefer the MiMovistar app rather than interacting with people. The closure of copper and traditional mobile phone networks will also have a serious impact.

It is unclear how much work will be done, and Telefónica declined to confirm that its target is 5,000 Spaniards. If it is accurate, this figure will account for nearly one-fifth of the workers in Spain. Last year, the company’s employees averaged 26,712. Since 2016, the number of employees in the country has fallen by 3,500, and earnings reports show that Telefónica’s overall workforce has shrunk by nearly 8% during this period to 121,853 employees by 2018, in part because of asset sales.

Despite some measures, during this period, the annual income of each employee fell from nearly $460,000 to less than $450,000, and in 2012 it fell by about $527,000 (using the most recent exchange rate). Telefónica’s profit margin (based on operating income before depreciation and amortization) fell from 34% in 2012 to 32% last year. Its share price has fallen by 30% in the past three years.

The efforts of Telefónica have been successful, with the total cost of retraining and voluntary retirement plans estimated at 1.6 billion euros ($1.8 billion) before tax. However, investors need not panic because Telefónica expects to cut annual spending by 220 million euros ($242 million) from 2021 – probably just before the next round of restructuring.