Vodafone Spain plans 1,200 job cuts after acquisition by Zegona

MADRID (Reuters) -A former Vodafone unit in Spain that was recently acquired by Zegona Communications plans to cut up to 1,200 jobs, or just over a third of its total workforce, unions and the company said on Wednesday.

The plan comes after London-listed Zegona closed the 5 billion euro ($5.41 billion) acquisition last month.

Vodafone Spain, which has kept its brand name after reaching a 10-year agreement with Zegona, said in a statement it was convinced that the layoffs were the only way to guarantee its future viability and competitiveness.

The company, which said it has suffered a strong financial and commercial deterioration, cited economic, production and organisational reasons as behind its plans to cut costs.

Vodafone Spain's total revenues were down by 8% and it has lost approximately 400,000 contract customers in the last two years, it said.

"The voracity of a management incapable of devising real solutions to the real problems that have afflicted Vodafone Spain, and the inaction of an administration that did not ask for any guarantee for employment in the approval of the sale of Vodafone Spain to Zegona, come together," the UGT union said.

The former Vodafone unit is the third-largest telecom operator in Spain after the local units of Orange and Telefonica.

Zegona has previously bought and sold regional operators Telecable and Euskaltel in Spain.

(Reporting by Matteo Allievi and Emma Pinedo; Writing by Andrei Khalip; Editing by David Latona and Jan Harvey)