Global telecom employment fell 2.1% year-on-year in the second quarter of 2026, a faster drop than the industry's decade-long average, according to a new report from MTN Consulting. The panel of 145 operators covered by the study employed about 4.2 million people, down from 4.3 million a year earlier. The latest contraction extends a decline that began in 2016 and outpaced the 1.7% annual average recorded over the past ten years.

Matt Walker, chief analyst at MTN Consulting and the report's author, traced a workforce that keeps shrinking while the bill for the remaining staff keeps growing. The numbers tell a story of pressure from both directions. Job cuts have not consistently reduced labour costs, and the report found no direct link between AI adoption, smaller workforces and wider margins.

Do job cuts actually improve margins?

Among 72 sizable operators, MTN Consulting found no measurable relationship between headcount changes and trailing four-quarter EBIT margins. That result cuts against one of the industry's most repeated assumptions: that trimming staff translates into healthier operating performance.

The evidence on AI tells a similar story. The report found no consistent link between AI-related announcements and restructuring. Telefónica cut its headcount by 19.3%, the steepest reduction in the industry, yet carried no tagged AI-automation news. SK Telecom drew the most AI coverage among the panel and reduced headcount by a comparatively modest 6.2%.

Operators that cut staff were more likely to improve operating margins than those that did not, but the advantage was far from guaranteed. Event studies dating to 2011 found restructuring operators outperformed non-cutting peers in roughly 57% to 67% of cases — better than a coin flip, but not a reliable playbook.

How does this compare with the AI optimists?

The findings sit uncomfortably beside other industry surveys. Nvidia's fourth annual State of AI in Telecommunications report stated that about 65% of respondents reported AI-driven revenue gains or annual cost reductions above 5%.

MTN Consulting's own numbers are far more sober. Fewer than 20% of global operators increased revenue by more than 5% a year, and fewer than 20% cut operating expenses by more than 5%. Only three operators — BSNL, Iliad and MTN Group — achieved both, representing less than 2% of the global market.

The firm said the gap suggested survey responses reflected industry optimism rather than audited operating results. In other words, questionnaire enthusiasm has not yet shown up in the financial statements.

Why is the labour bill still rising?

Labour costs per employee across the global panel rose 6.8% year-on-year to about $62,500. Higher compensation per worker more than offset the savings from job cuts, leaving the industry's total labour bill higher than before. An operator can shed thousands of positions and still spend more on people, which is roughly what the sector did in the quarter.

Which regions are hiring, and which are cutting?

Asia was the only region to add workers during the quarter, with headcount up 0.6%, largely on hiring by operators including KDDI. Europe posted the largest decline at 3.4%, driven partly by Telefónica's 19.3% reduction. Employment fell 2.8% in the Middle East and Africa and 1.2% in the Americas.

The report closes with advice aimed at the whole ecosystem. MTN Consulting urged operators, vendors and investors to assess workforce changes and automation returns using detailed financial data rather than broad technology claims. With headcount down 2.1% and the labour bill still climbing, that discipline looks set to shape how the industry judges its next wave of restructuring announcements.