BrazilKearney and McKinsey working on Telefónica reorganisation
Spanish telecom giant Telefónica has called in the help of management consulting firms Kearney and McKinsey to support with two reorganisation programmes.
Consultants from Kearney are currently working on a restructuring process in the International Wholesale Services division, which is Telefónica’s unit that provide services to fixed and mobile operators, service providers, wholesale carriers and multinationals in mainly Southern Europe and Latin America.
The division supports its clients with traditional telecom services such as voice, carrier enterprise, mobile and satellite, but increasingly also with emerging technologies such as security, cloud, internet of things, big data, as well as digital platforms and solutions. Telefónica’s International Wholesale Services arm has a presence in 16 countries, and through different joint ventures it offers its services in more than 100 markets.
Illustrating the company’s footprint, last year the division supported over 24 billion of international voice minutes, >1.2 billion text messages and carried nearly 100 petabytes of data roaming traffic.
As part of a refurbished strategy, and a change in organisational structure, the management of the division have been directed to improve the performance of the unit. In November 2019, Telefónica announced it would integrate the International Wholesale Services wing into its larger Business Solutions unit, in order to form a larger practice serving the business community, and to better be able to package and sell digital-driven services to corporate clients.
According to the integration’s business plan, the joining of forces should act as a catalyst for an additional revenue of €2 billion by 2022.
The work of Kearney – formerly A.T. Kearney – is focused on identifying areas of improvement. The firm’s consultants are conducting an organisational audit on the unit, seeking possible overlaps in people and activities (in particular in back-office functions), with the goal of making the organisation as efficient and agile as possible.
It is at the time of writing unknown if the cost cutting and operational rationalisation exercise will lead to job cuts. According to reports in Spanish media, Kearney’s team has been installed a few months ago, and will continue their work for several more months.
Meanwhile, Telefónica’s main strategic consultant, McKinsey & Company, is working with the telecom company’s top management on the execution of its current strategic plan, called Reconecta. Simplification of the organisation is one pillar of the strategy, and McKinsey is overseeing a programme aimed at restructuring the corporate headquarters in Spain and several larger subsidiaries abroad.
Reports in Spain speculate that this programme will see some 500 managers forced out of the company.
Last year, Telefónica's start-up platform Wayra entered a partnership with consulting firm BearingPoint.
