Telefonica (TEF) will incur a cost of 2.5 billion euros ($2.94 billion) for the layoffs of about 5,500 staff, according to a company regulatory filing on Monday.

The company said it has reached an agreement with trade unions to execute exit plans that will result in average annual cost savings of around 600 million euros starting 2028.

The impact on cash generation will be positive from 2026, with the layoffs expected to start as early as Q1 of 2026, Telefonica said.

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