In recent years, Eurotel has not met its expected targets due to declining revenues and profits, so reducing expenses through layoffs has become the most common method. According to the plans of major European telecom operators, it is expected that by the end of 2030, about 100,000 employees will be laid off.
In fact, not only the European telecommunications industry has entered a cold winter, but the Americas, including the United States, are also facing a wave of telecom layoffs.
1.Representative Telefónica at the end of 2022 had about 210,000 employees, while Telefónica is about to submit a "voluntary separation" plan to the union, involving the layoffs of 5,000 jobs.
2.In addition to telecom operators, European telecom equipment companies are also facing a layoff crisis. Telecom equipment manufacturers, led by Nokia (Finland) and Ericsson (Sweden), have also announced layoffs.
1) Nokia will lay off 090,000 to 140,000 yuan, in order to save 1.2 billion euros (equivalent to 9.3 billion yuan) in labor costs.
2) Ericsson launched a layoff plan at the beginning of 2023, which will cut 8,500 employees worldwide.
The main reasons for layoffs in the European telecommunications industry:
1.With the continuous upgrading of telecom technology, a large amount of money needs to be invested in the research and development and construction of optical fiber and 5G technology, and the huge investment can no longer be supported by the growth of traditional services, so layoffs are the fastest and most effective way. Further reducing labor costs through layoffs has achieved the goal of increasing revenue and reducing expenditure, and in fact, layoffs are also the most difficult choice for the telecom industry.
2.Overload and disorderly competition have led to insufficient growth in the efficiency of telecom operators, and it is necessary to reduce expenses.
3.The expansion of new services has become a stumbling block to the development of the European telecommunications industry. Due to cost control, European telecom companies have insufficient investment and reserves in new technologies such as cloud computing and 5G, and lack of medium- and long-term development plans for services, which ultimately leads to the lag in new service development.
4.The impact of "de-Chinaization" on European telecommunications is severe. Since before the EU announced the implementation of the sanctions against China, more users used Chinese brand mobile phones, after the "de-Chinaization", European telecom operators removed China's Huawei communication equipment, resulting in poor adaptability between terminals and networks, and ultimately caused the instability of users' mobile phone signals. It is this reduction in the quality of network services that has also caused the European telecom operators to reduce their revenues, and they have had to make up for the lack of revenue through layoffs.
In fact, the downturn in the European telecommunications market is not only due to planning and technical reasons, but also to market reasons, especially because of the large number of European telecom operators. As we all know, the number of telecom operators in China is only four if you count the new entrants of China Radio and Television, but in Europe there are more than 100. A small population, a small market, and a large number of operators will inevitably lead to fierce competition in the European telecommunications market.
On the other hand, China's telecom market is showing a thriving scene, taking the operating data of the first three quarters of 2023 as an example:
1.In terms of revenue, the revenues of China Telecom, China Mobile and China Unicom were 381.1 billion yuan, 775.6 billion yuan and 281.7 billion yuan respectively, a year-on-year increase respectively. 2% and 67%, and the revenue growth was higher than 5 in the same period2% GDP growth;
2.In terms of profits, the net profits of China Telecom, China Mobile and China Unicom reached 27.1 billion yuan, 105.5 billion yuan and 7.6 billion yuan respectively, a year-on-year increase. 1% and 109%, the profit growth rate of the three operators is higher than the revenue growth.
Will the current situation of the telecommunications market in Europe and the United States become the future of China's telecommunications market?Telecom is a high-investment, high-tech application industry, not only to seize the opportunity to actively apply new technologies, but also to have a keen insight to judge the medium and long-term telecommunications market demand for new services, only in this way can it be possible to maintain the rapid and sustainable development of the industry.