Telefonica Brasil SA (VIVT4.SA) has opened a voluntary buyout program to cut 1,000 jobs, a union said on Wednesday, as the Brazilian phone company works to keep down costs and overhaul its flagging fixed-line operations.
The Brazilian unit of Spain's Telefonica (TEF.MC) said it was carrying out an "administrative reorganization to maintain competitiveness," according to a press release. A company spokeswoman did not comment on the number of employees involved.
A sharp sales slowdown in the wireless market and aggressive competition from broadband rivals have forced Brazil's telecom leader to tighten its budget in order to maintain profitability.
Cost controls and one-time asset sales allowed Telefonica Brasil to hold net income stable in the fourth quarter compared with a year earlier. Still, management made clear they were not satisfied with the company's competitiveness.
"We are not happy with our general performance in the fixed business, mainly in TV and broadband. We are in the process of implementing a strong tactical plan to turn around this business," senior executive Paulo Cesar Teixeira told analysts on a conference call last month.
Stiffer broadband competition in Telefonica's core Sao Paulo market contributed to a 7.6 percent drop in fixed-line revenue in the fourth-quarter from a year earlier, barely offset by rising revenue from wireless services.