Spanish telco Telefónica has reached an agreement with unions to lay off 3,421 employees.

In a statement, the telco noted that the agreement has been "unanimously supported by the company and the workers' representation" (UGT, CCOO and Sumados), with 24 votes in favor, zero against and no abstentions.

The agreement, which is valid until December 31, 2026, will pave the way for the carrier to become a "more digital company, flexible and prepared for future challenges in a highly competitive and profoundly transformed context."

"Likewise, and in parallel, it has been agreed to carry out collective dismissals of up to a total of 3,421 workers, to which workers who turn 56 years of age or older during 2024 and have more than 15 years of seniority may join," said the company in a statement.

The agreement follows several media reports towards the end of last year, which revealed Telefónica's plans to cut as much as 5,100 jobs, as part of cost-cutting measures.

Telefónica currently employs around 21,000 people in Spain.

Globally the operator employs more than 103,000 people across Spain, Brazil, Germany, and the UK.

The plan to cut the jobs is expected to cost the telco around €1.3 billion ($1.42bn) (before taxes), with no impact on cash.

Telefónica expects the average annual savings from direct expenses will be around €285 million from 2025.