Telefónica has axed the roles of European head Eva Castilo and Telefónica Digital supremo Matthew Key as part of a wide ranging "digital restructure".

In a surprise statement, the operator announced it has brought together its digital, European and Latin American businesses into its global corporate centre.

Castillo will remain as a director and as president of the supervisory board for Telefónica Germany, while Key will continue as a director of its UK O2 operation, which he used to run.

Latin America chief Santiago Fernández Valbuena has been appointed chief strategy officer, with Castillo retaining her seat on the board of directors.

The CEOs of the local businesses within European and Latin America will now report to Telefónica Chief Operating Officer José María Álvarez-Pallete López. He will also be responsible for a new chief commercial digital officer, a role that was created today as part of the changes.

The Spain-based operator said a Chief Global Resources Officer, whose responsibilities were bolstered in the wake of the restructure, would be responsible for finding gross savings of €1.5 billion and will also report into Lopez.

Telefónica said the new structure would bring local operations closer to the decision making process, simplify how the company is run and make it more flexible. It said it wanted to grow its digital revenues, modernise its systems and increase efficiency through simplification and cost cutting.

The structure was approved at a board meeting held today (26 February).

Cesar Alierta, Telefónica’s president, commented: "We have witnessed a real explosion in data traffic over both fixed and mobile lines.

"But the deployment of LTE, the massive adoption of connectivity on all kinds of devices, the new digital services and the growing use of video, have all made the growth seen in recent years pale into insignificance when compared with the volume of mobile data traffic we are going to see over the next 5 years, which is expected to multiply by 11 with respect to 2013.”

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