Telefónica's German subsidiary O2 Germany has confirmed that it will cut more than 1,100 jobs as part of the company's transformation program.

Confirmation of the cuts come after reports emerged last week that the Spanish telecoms giant was looking to streamline its workforce in Germany.

The carrier said this week that it will look to cut 1,100 jobs by the end of this year as part of these plans, with CEO, Santiago Argelich Hesse, hinting at a more prominent usage of AI technology.

Telefónica has more than 6,800 employees in Germany.

“We want to further establish Telefónica Deutschland as the leading provider of digital infrastructure and services for people and businesses in this country. To this end, we are realigning our team and our processes," he said. "We are simplifying the organisation, consolidating activities and intensifying the use of artificial intelligence in key processes. In this way, we are safeguarding Telefónica’s competitiveness and future viability."

A planned voluntary leaver program will be launched as part of plans to facilitate the job cuts.

The carrier also noted that 60 shops will be closed across the country. Telefónica’s retail footprint in Germany currently spans around 800 locations. These closures represent around 8 percent of its retail offering, and are part of plans to focus on digital sales channels, though it hints that further cuts could happen by 2028.

Telefónica has booked a restructuring provision of around €265 million ($301m) for Q2, followed by a further €155m ($176m) during the second half of the year.

Long-term, the telco said the cuts will generate annual savings of around €185m ($210m) from 2028 onwards.