France Telecom Culls UK Staff
The cull is part of a broader headcount reduction program unveiled in February in its 2005 annual report. Then, France Telecom said it would cut 23,000 jobs and hire 6,000 new staff worldwide for a net reduction in employees of 17,000, almost 10 percent of the global carrier's workforce.
That decision followed a disappointing 2005 and the replacement of the operator's CFO. (See FT Warns, Europe Quakes and France Telecom Gives CFO Le Boot.)
The staff cut in the U.K., which will account for about 15 percent of the current 13,500 staff, is part of the NExT (New Experience in Telecoms) strategy announced last year to offer fixed and mobile services jointly under a single brand. (See Eurobites: Big Guns Fire Salvos.).
In an emailed statement, Orange says: "In an ongoing effort to adapt to customer needs and an increasingly competitive environment, Orange UK is implementing an integrated strategy, launching innovative offers and reviewing all of its operational costs... Wanadoo UK is now part of an integrated Orange UK mobile and broadband business instead of a stand-alone operation. We are taking the unique opportunity provided by this integration to further create a leaner organisation that will be better equipped to compete."
The company says the jobs will be cut "mainly through a combination of redeployment, natural attrition, non-renewal of temporary short term contracts, and, as a last resort, some redundancies." Bernard Ghillebaert, executive VP of Orange UK, will head up the combined business, while Wanadoo UK's CEO Eric Abensur will be VP responsible for broadband.
FT's move could be followed by a similar staff reduction by Vodafone Group plc (NYSE: VOD), reckon analysts at Lehman Brothers . In a note issued this morning, the Lehman team said France Telecom's move "shows the capacity for material headcount cuts in mobile, which we expect to be a feature for Vodafone at its results presentation on 30 May."
Vodafone is to announce its new strategy at the end of this month and will likely include a move into the fixed broadband sector, giving it a fixed/mobile package that could rival Orange's offer. (See Mobile Giants Size Up DSL.)
— Ray Le Maistre, International News Editor, Light Reading