Telefónica Group’s Brazilian operations announced plans to cut 1,500 jobs. The announcement followed a pair of government decisions ordering the group to pay fines for not meeting service quality agreements.
The job cuts are part of the group’s integration process that began in mid-2010, and represents about 7.5% of firm’s total work force. Cuts will occur at plants in São Paulo and Rio de Janeiro, with employees able to sign up for a voluntary redundancy program between March 12 and 14. According to the Sintetel union, Telefonica had initially planned to lay off more staff. However, the union was able to reduce the amount of job losses and obtained a benefits package for those employees who were affected by the cuts.
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As for the government fines, Vivo was ordered to pay $2.28 million (R$ 4.1 million) to the government for not meeting service quality agreements. The mobile carrier failed to meet targets established for the period between October 2005 to September 2006. Although the breach of the quality rules occurred six years ago, the National Telecommunications Agency (Anatel) published the decision in the Official Gazette on March 9. The process has been finalized in Anatel, but Vivo has said it will go to court to fight the decision.
Last month Telefonica was ordered to pay $3.48 million for anticompetitive practices in the wholesale market.
