Volkswacht Bodensee - Telefonica to shed around 5,500 jobs in Spain

The figure represents nearly a quarter of the company's workforce in Spain, based on a Telefonica count given last year of 25,000 employees in the country.

Worldwide, Telefonica employs 100,000 people.

Last month, it announced last month a new, five-year strategic plan that will see it focus on its main markets of Spain, Germany, the UK and Brazil as well as restructure many of its operations.

It then began talks with Spanish trade unions about reducing jobs.

"An agreement was reached with the trade unions... concerning the implementation of a voluntary departure plan for approximately 5,500 workers," Telefonica said in a statement released via the stock market regulator.

It estimated the cost of the plan at around 2.5 billion euros ($2.9 billion) before taxes.

The company booked a net loss of 1.08 billion euros between January and September this year, weighed down by losses linked to asset sales in Latin America.

Telefonica has also said it will cut its dividend by half next year, to 15 cents per share, as part of effort to reduce its debt.

L.Maurer--VB