Orange indicated it was set to begin negotiations with employees in Spain over plans to cut almost 500 jobs, stating structural changes were essential for it to compete against the numerous low-cost players in the market.

In a translated statement, Orange Spain explained its plan would impact a maximum of 485 employees, equivalent to around six per cent of its total staff based on figures published alongside the operator group’s Q1 results.

“The telecommunications sector has been experiencing loss of income for years as a result of the hyper-competitiveness of the market and the number of low-cost players,” it added.

“This poses a great challenge for the company that has been assuming intensive investments for more than 20 years and that needs to continue doing so in an environment of technological transition.”

Changes will take place over the next two months following negotiations with employee representatives.

Its move follows several financial statements where the company has cited fierce competition in Spain for hampering group performance. Last month Orange CEO Stephane Richard said its recovery in the market was a priority.

Spain is Orange’s second-largest market behind its home country of France in terms of revenue and mobile connections, with the operation contributing almost as much to group top line as the rest of its European units combined (excluding France) in Q1.