Feeds

France Telecom job cuts hoped to kick-start privatization

14,500 to go during 2004

  • alert
  • submit to reddit

Top three mobile application threats

France Telecom is to shed 7% of its global workforce as part of its restructuring plans, helping the French government to kick-start its stalled privatization program. The carrier remains some way behind its European rivals in efficiency terms but its management team continues to make progress.

The carrier is to lose 14,500 jobs during 2004, but insists the cuts will come about through early retirement and reassignment to other branches of the state civil service, rather than lay-offs. The cuts would move the operator close to its goal of cutting 22,000 French employees between 2003 and 2005.

At the end of 2003, France Telecom employed approximately 216,000 people (126,000 in France and 90,000 abroad). It expects this figure to shrink to about 202,500 by the end of this year.

Union representatives said they were concerned about the effects of the job losses. "It's going to lead to chaos in our services, and we're going to lose skills," said Jacques Lemercier, head of the communications workers' arm of the Force Ouvriere union.

The cuts are part of France Telecom's attempts to gain operating efficiency, as the French government looks to restart its stalled privatization program. The French government's 56% stake in the company, which has a market capitalization of E56 billion, is by far the most valuable of the government's liquid holdings.

By law, the French government's stake must remain above 50%, but a new law that took effect this month removed the government's obligation to maintain a controlling stake in the one-time national telephone monopoly.

It is widely expected that the French government will sell a significant part of its holding in coming months. Unfortunately, the French operator still has some way to go before it can match the operating efficiency of some of its European competitors. In 2002, France Telecom was nearing collapse after a spending spree left it facing a huge debt pile of E68 billion.

However, a combination of new management, a highly controversial cash injection of E9 billion by the French government, and a restructuring program, has helped put the carrier on the road to recovery. France Telecom is currently saddled with a debt burden totaling E49 billion.

Source: ComputerWire/Datamonitor

Related Research
Voice Business Market Update: Enter the Titans

The Essential Guide to IT Transformation

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Airbus promises Wi-Fi – yay – and 3D movies (meh) in new A330
If the person in front reclines their seat, this could get interesting
UK Parliament rubber-stamps EMERGENCY data grab 'n' keep bill
Just 49 MPs oppose Drip's rushed timetable
ITC: Seagate and LSI can infringe Realtek patents because Realtek isn't in the US
Land of the (get off scot) free, when it's a foreign owner
Samsung threatens to cut ties with supplier over child labour allegations
Vows to uphold 'zero tolerance' policy on underage workers
Dude, you're getting a Dell – with BITCOIN: IT giant slurps cryptocash
1. Buy PC with Bitcoin. 2. Mine more coins. 3. Goto step 1
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
prev story

Whitepapers

Seven Steps to Software Security
Seven practical steps you can begin to take today to secure your applications and prevent the damages a successful cyber-attack can cause.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Designing a Defense for Mobile Applications
Learn about the various considerations for defending mobile applications - from the application architecture itself to the myriad testing technologies.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.