Telefónica yesterday announced a global restructuring of its business units and operations.

The company announced that its Spain division will no longer operate as an independent unit, but will instead form part of a newly created European business unit. Its other business unit will be the Latin America division, led by Santiago Fernández Valbuena, former group director of strategy, finance and development.  The European unit will be headed by María Álvarez-Pallete, former director of the Telefónica’s Latin America operations.

Another major change announced is the creation of Telefónica Digital, a new division based in London, which will have branches in Madrid, some as yet undefined cities in Asia, Silicon Valley and Latin America—in São Paulo, Brazil.  Telefónica Digital will be led by Matthew Key, who was previously Telefónica’s director of European operations (excluding Spain).

The goal of Telefónica Digital will be to expand the group’s digital business, focusing on digital innovation, video and entertainment, digital advertising, financial services, cloud computing, and M2M. Latin America is a key market for this purpose. During the first six months of 2011, 46% of the group’s sales came from Latin America, according to Telefónica.

The companies grouped under Telefónica Digital will be Terra, Tuenti, Jajah, Telefónica I+D, and Media Networks, among other digital properties belonging to the group or in which Telefónica is a majority shareholder. In total, the group will have over 2,500 professionals on staff, according to the company’s statement.

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