France Telecom job cuts threaten future at Orange
France Telecom, which owns UK mobile phone operator Orange, said today that it would cut 7,500 jobs in its home country this year.
Speaking on Europe 1 radio this morning, chairman Thierry Breton said the debt-laden company was taking further cost-cutting measures in efforts to reduce the money it owed.
The state-run company is looking to almost halve its debt within two and a half years to a “bearable” level of around €35bn.
Citing a document presented at a France Telecom board meeting yesterday, French union officials are reported to have said the company is planning to cut around 13,000 jobs worldwide this year. The picture for UK jobs remains unclear.
The company has maintained any job losses will be from normal departures and retirements only, not layoffs.
Mr Breton said retirements between now and 2005 would account for 22,000 job cuts.
France Telecom has debts of around €70bn from a massive acquisition drive during the 1990s.
Debt will be cut by reducing the company’s working capital and operating costs, and with “marginal” asset sales.
As it reported the cost-cutting plans, France Telecom also gave details of board changes at its Orange mobile phone subsidiary.
Orange is 88%-owned by France Telecom and the company today named American Solomon Trujillo as its new chief executive following the resignation of Jean Francois Pontal in December.
The move is part of the radical shake-up imposed by newly arrived Mr Breton.
At the same time, France Telecom said UK-based Orange finance director Simon Duffy was stepping down.
The company said Mr Duffy had “expressed his wish to pursue other career opportunities” and would be replaced by Belgian-national Wilfried Verstraete, chief financial officer of France Telecom’s Internet unit Wanadoo.
Some analysts and observers are now speculating that Orange’s deputy chief executive Graham Howe – who helped found the mobile operator a decade ago - could also be about to leave the group.
