Telefónica Mexico Announces Country Exit: What Will Happen to Employees and Customers?

The 2013 telecommunications reform promised to open the sector, but market concentration and regulatory costs ultimately affected the company’s profitability. Telefónica faced fines, increases in spectrum usage costs, and a series of barriers that hindered its expansion.

In 2019, the firm made a crucial decision to cede its mobile network to AT&T through an agreement to use its infrastructure for the wireless last mile. This allowed it to reduce costs and operate as a mobile virtual network operator (MVNO), similar to Virgin Mobile or Walmart’s Bait. Despite this measure, profitability failed to rebound.

It is estimated that the transaction could reach 500 million euros (around 575 million dollars), although neither Telefónica nor Beyond One have publicly confirmed the negotiations.

Until the sale is finalized, telephone and internet services will continue to function without interruptions. The company assured that both retail and corporate clients would continue to receive support and coverage. Once the transfer is formalized, users would be gradually migrated to the new operator to avoid disruption.

The news of Telefónica’s departure has raised alarms among its more than 2,000 direct and indirect employees in Mexico, who await clarity on their employment future.

So far, the company has not offered details on possible layoffs, reassignments, or personnel transfers. However, in previous processes of selling operations in other Hispanic American countries, Telefónica has opted to absorb part of the workforce into associated companies or offer severance packages in accordance with local law.

In Mexico’s case, an orderly transition process could be expected, in which the buyer (if Beyond One is confirmed) might retain part of the operational and technical staff, especially in customer service and network support areas.

The employment impact will largely depend on the final sale structure and the commitments undertaken by the new operator.

Should the transaction materialize, employees could face three main scenarios:

• Partial absorption of personnel by the buyer, especially technicians, engineers, and maintenance staff.
• Relocation within Telefónica in other regions or subsidiaries, although this would be limited given the divestment in Hispanic America.
• Severance packages in accordance with the Federal Labor Law, with compensation for seniority and contract termination.

For administrative staff, commercial executives, and sales personnel, the future appears more uncertain. Many could be rehired by subcontracting companies or new mobile virtual network operators, but under different conditions.

According to Telefónica, millions of customers will continue to receive their services without interruption during the sale process. When the new operator takes control, users will be notified and their migration will be carried out in a staggered manner, guaranteeing continuity in calls, data, and contracted plans.

Should the purchase by Beyond One materialize, an integration under the Virgin Mobile Mexico brand is expected, which would maintain current service and coverage conditions. Users will not need to perform any additional procedures, and their lines will remain active. However, adjustments to rates, benefits, or plans could occur once the transition is complete.