Telefónica is accelerating its departure from several Latin American markets as part of a broader push to streamline its global operations. The Spanish telecommunications giant recently reached an agreement to sell its technology subsidiaries in Colombia, Mexico, and Chile to Hiberus, a prominent Spanish tech firm. This divestment marks a significant step in Telefónica’s “Transform & Grow” strategic plan, which focuses on prioritizing core markets—specifically Spain, the United Kingdom, Germany, and Brazil—while shedding non-essential assets to boost overall profitability.

The deal isn’t a total severance, however. Both companies intend to maintain a strategic alliance, ensuring that Telefónica Tech can continue to support its multinational clients throughout the region. For Hiberus, the acquisition is a major milestone in its own expansion, allowing it to consolidate its presence in key Latin American territories. Sergio López, CEO of Hiberus, noted that the move brings in a highly specialized team that will spearhead the company’s regional efforts in high-growth sectors like cybersecurity and cloud computing.

Operational Continuity and the Digital Operations Center

Despite the change in ownership, Telefónica is keeping a foot in the door to maintain service stability. The Digital Operations Center (DOC) in Colombia will remain under the Telefónica Tech umbrella, functioning as a vital hub for round-the-clock client support. Company leadership emphasized that maintaining these facilities across multiple time zones is essential for providing uninterrupted, cost-effective service to its global customer base.

In the background, Telefónica is also negotiating a more permanent exit from the three countries involved in the Hiberus deal. The company is currently in exclusive talks with the Beyond fund regarding its Mexican business and has already secured an agreement with Millicom for its Colombian operations. All eyes are now on Chile, which is considered the most valuable of the remaining Latin American subsidiaries; the company is currently awaiting a formal offer that matches the asset’s significant market price.

Internal Overhaul and the Human Cost of Efficiency

While the company looks for growth abroad, its domestic operations in Spain are undergoing a painful transformation. Marc Murtra, who has chaired the company for nearly a year, is overseeing a massive cost-cutting initiative designed to improve efficiency and scale. This includes a series of workforce adjustments—known in Spain as EREs—that are expected to result in approximately 5,500 layoffs across various subsidiaries.

In a year-end letter to employees, Murtra addressed the gravity of these cuts. He acknowledged the difficulty of balancing corporate health with the lives of those affected, stating that while the new roadmap is designed to ensure a profitable future, he is mindful that what is good for the company can be devastating for individuals. Despite the internal friction, Murtra remains optimistic about the “Transform & Grow” mission, asserting that the new vision is essential for Telefónica to regain its competitive edge.

Navigating Market Turbulence and Infrastructure Milestones

The transition hasn’t been entirely smooth on the stock market. Following the announcement of the new strategic plan in November—which included a dividend cut and the possibility of capital increases for future acquisitions—Telefónica’s share price saw a sharp decline. Currently trading below 3.5 euros, the stock has struggled to return to the 4.3 euro levels seen as recently as October. Murtra, however, dismissed the initial market jitters, suggesting that investors often fail to anticipate the long-term benefits of a strategic pivot.

Beyond the financial volatility and layoffs, the company has hit several operational benchmarks this year. Telefónica successfully expanded its 5G coverage to 94% of Spain and secured long-term broadcasting rights for both LaLiga and the Champions League. These moves, combined with a focus on advanced digital solutions like AI and the Internet of Things, are intended to cement the company’s status as a leader in both premium content and high-tech enterprise services as it moves into the next phase of its evolution.