Global hyperscale and cloud headcounts are now three percent higher than the telco workforce, as the industry faces a “structural shift” driven by AI and automation, a new report claims.

MTN Consulting's Telco Talent Tracker 2Q25, published in December, revealed that the number of telco employees fell 1.9 percent year-on-year (YoY), down to 4.36 million.

Hyperscale and cloud headcounts surpassed telco headcounts in 2Q24. Just 14 years before, the telco sector employed nearly four times as many people.

MTN said that the latest figures show a “fundamental shift in the telecommunications and technology landscape.”

Telco headcount is dropping by around 20,000 per quarter, made up by a mix of layoffs, retirements, outsourcing, and spinoffs.

Workforce cuts present an “easy symbolic move for CFOs,” the report said, adding that there was “no clear link” between layoffs and margin growth.

The largest declines in headcount came from Telefonica at a 10,600 total reduction in headcount, followed by AT&T (8,500), BT (7,200), Charter Communications (6,400), and Grupo Televisa (4,500).

According to MTN, the shrinking workforce is a “structural” trend, with telcos now prioritizing staff adept in software coding, cloud services, AI, and quantum computing.

Labour costs per employee are rising, driven largely by rising salaries in emerging markets, but profit per person has risen by 28 percent in six years.

As a percentage of operational expenditure, labour costs were down by 22.2 percent YoY, which MTN said demonstrates “improving operational efficiency as telcos optimize their workforce composition and leverage automation technologies.”

But MTN said its data found “no direct correlation between headcount reductions and margin surges, even when accounting for multi-quarter lag.”

Other telecom companies have announced significant layoffs in recent months, including Verizon, which announced cuts to 15,000 jobs in November at a cost of nearly $2 billion.