May 25, 2011 / 6:34 PM / 8 years ago

UPDATE 1-Telefonica seeks to extend Spain job cuts -sources

* Plan could affect maximum 8,500 jobs in Spain -sources

* Revised plan follows talks with unions

* Shares close up 0.5 percent on Wednesday

(Adds background, shares)

MADRID, May 25 (Reuters) - Telefonica (TEF.MC) and unions want to extend a job reduction plan by two years, two sources with knowledge of the plan said on Wednesday, in a move that could lead to redundancies rising by an additional 2,500.

Telefonica proposes extending the cuts over five years but lifting the number of redundancies in Spain to up to 8,500 staff, the sources said. Unions have agreed to the extended timeframe, but not yet to the increased redundancies, one of the sources said.

Unions had rejected Telefonica’s initial plan to cut its Spanish staff by 20 percent, or 6,000 employees, in the next three years.

The new proposal, which would affect 25 percent of Spanish staff, will be formally presented to the Labour Ministry on Thursday, the sources said.

Telefonica declined to comment.

The telecom heavyweight’s Spanish business has suffered tough competition in a stagnant economy, making it more expensive to win and retain customers while unemployment affects more than one in five.

The new plan will affect 25 percent of Spanish staff over the next five years.

Telefonica’s shares closed up 0.51 pct at 16.68 euros per share. (Reporting by Robert Hetz; Writing by Tracy Rucinski; Editing by Jon Loades-Carter)

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