Telefónica Deutschland launches AI-driven restructuring plan in Germany

Telefónica Deutschland is implementing a major strategic overhaul titled ‘Transform & Grow’ to revitalize its operations in Germany. Led by CEO Santiago Argelich Hesse, the plan aims to transition the company into an ‘AI-first’ firm by integrating artificial intelligence across 150 use cases, including network management, customer service, and internal processes.

The restructuring follows the loss of a significant wholesale network lease contract with competitor 1&1, which had previously contributed up to 500 million euros annually. This loss, combined with declining revenues, has prompted a significant workforce reduction. The company expects to cut approximately 1,000 to 1,650 jobs by 2026-2028 and close around 60 stores to achieve greater operational efficiency and cost savings estimated at 185 million euros annually starting in 2028.

Looking ahead, Telefónica aims to reach a financial ‘inflection point’ in 2027 and achieve full ‘cruising speed’ by 2028. The strategy focuses on expanding into the corporate and residential markets through fiber and television convergence, while strengthening partner models like Aldi Talk. The ultimate goal is to modernize the company’s architecture to compete more effectively in Europe’s largest telecommunications market.