Telefonica mulls 450-million-euro handout

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Spanish telecoms giant Telefonica said Friday it may give shares worth 450 million euros to it senior employees, one day after it announced a 20-percent cut in its domestic workforce as a cost-cutting measure.

The "incentive plan", which would benefit "around 1,900 managers" over five years, is to be voted on at the next shareholders' meeting on May 17, Telefonica said.

"The maximum amount of the plan is set at 450 million euros ($650 million)," it said.

Telefonica announced this week it would pay its shareholders a minimum divided of 1.75 euros per share from 2012, or almost 8.0 billion euros per year.

The group said Thursday it plans to cut its workforce in Spain by about 20 percent, or some 6,000 people, over the next three years.

The head of the group's business in Spain, Guillermo Ansaldo, said the job cuts would allow the company to gain "flexibility".

Telefonica employs some 30,000 people in Spain out of a total global workforce of 269,000 people.

The head of the UGT union, Candido Mendez, described the announcements as "shameful."

Employment Minister Valeriano Gomez said Thursday "it is not a good moment to carry out staff adjustments of such a significant size," with unemployment last year at a 13-year high of more than 20 percent.

Telefonica posted a record 2010 net profit of 10.2 billion euros, a 30.8 percent jump over the previous year as weakness in Spain was offset by strong growth in the rest of Europe and Latin America.

The company's revenues in Spain were down by five percent last year.

© 2011 AFP

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