Telecom Sector Sees Job Decline Amid Rising Labour Costs and Mixed AI Impact

Image: Illustrative image · Dhakatech · CC0 · Source

Global telecommunications employment dropped 2.1% in Q2 2026, continuing a decade-long trend, while labour costs per employee rose 6.8%, according to MTN Consulting. The report finds no consistent link between AI adoption, workforce reductions, and improved profits.

The global telecommunications industry experienced a 2.1% year-over-year decrease in employment during the second quarter of 2026, according to a report released by MTN Consulting. This decline extends a gradual reduction in telecom jobs that has been ongoing since 2016. The panel studied included 145 operators who collectively employed approximately 4.2 million people, down from 4.3 million one year prior.

MTN Consulting’s chief analyst, Matt Walker, highlighted that the rate of job decline in this quarter exceeded the decade-long annual average of 1.7%. Despite these staff reductions, the report found that labour cost savings were not guaranteed. In fact, the average labour cost per employee increased by 6.8% year-on-year to about $62,500, so total industry labour expenses actually rose, offsetting some of the savings from job cuts.

The analysis explored the relationship between workforce changes, artificial intelligence (AI) adoption, and financial performance. It uncovered no consistent direct correlation between headcount reductions and improved earnings before interest and taxes (EBIT) margins across 72 sizable telecoms. Furthermore, no clear pattern emerged linking AI-related announcements to workforce restructuring. For instance, Telefónica had the steepest staff reduction at 19.3% yet no related AI-automation news. Conversely, SK Telecom received considerable AI media coverage but only cut staff by 6.2%.

The MTN Consulting findings contrast somewhat with other industry surveys such as Nvidia’s fourth annual State of AI in Telecommunications, which reported that about 65% of respondents experienced AI-driven revenue growth or cost reductions exceeding 5%. MTN Consulting found that fewer than 20% of global operators achieved revenue increases or operating cost cuts greater than 5% annually. Only BSNL, Iliad, and MTN Group—a combined less than 2% of the global market—managed improvements in both metrics.

Regionally, Asia was the only area to increase telecom employment during the quarter by 0.6%, driven largely by hires at operators like KDDI. Europe had the largest employment decline at 3.4%, influenced partly by Telefónica’s large staff cuts. The Middle East and Africa saw a 2.8% reduction, and the Americas a 1.2% drop.

While operators reducing workforce size experienced an above-average chance of improved operating margins, this outcome was not ensured. Historical event studies since 2011 indicated that such operators outperformed those who did not cut staff only 57% to 67% of the time.

Given these mixed results, MTN Consulting recommends that telecom operators, vendors, and investors evaluate staffing and automation strategies based on detailed financial data and results rather than broad industry claims regarding technology and AI.

This data presents a complex picture of the interplay between job cuts, rising employee costs, and technology adoption across the global telecom sector, indicating that workforce optimization remains a nuanced challenge.