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France Telecom to cut 14,500 jobs worldwide

France Telecom said on Monday it will cut about 14,500 positions through early retirement or reassignment to other public companies in 2004 as the former monopoly pushes ahead with its massive restructuring.
/ Source: Reuters

France Telecom said on Monday it will cut about 14,500 positions through early retirement or reassignment to other public companies in 2004 as the former monopoly pushes ahead with its massive restructuring.

A France Telecom spokesman said the cuts were in line with forecasts made in late 2002, when the company announced a restructuring plan to repair its balance sheet after a rapid expansion spree nearly crushed it with debt.

At the time it said it would cut about 20,000 positions in France through early retirement and reassignment over the next three years.

"These are not redundancy plans," a France Telecom spokesman said of the job cuts, which were announced to the company's unions earlier on Monday.

The headcount reduction comes as the company is in the throes of its restructuring and making a change to its legal status that should pave the way for further privatisation.

The government late last month passed a law that will allow France Telecom's civil servants to retain their status -- they can't be fired -- even when the company is no longer majority owned by the state.

The restructuring has included a 15 billion euro capital increase, the refinancing of 15 billion euros of debt and calls for the generation of 15 billion euros in free cash flow to be used for debt reduction from 2002 to 2005.

Job cuts
In 2004, the company will cut 8,800 net jobs in France, including 8,000 early retirements, 2,200 reassignments and 1,400 new hires, the spokesman said.

The reassignments are taking place under an ongoing programme that should allow civil servants at France Telecom to find positions at other public companies or parts of the administration.

Internationally, France Telecom will eliminate 5,700 jobs, the company said. In 2003 the company cut 7,700 positions in France and 5,400 internationally through similar measures.

France Telecom, which had 217,000 employees at the end of 2003, said it expected to have about 202,500 by the end of this year.

The new hires will be in research, technology and sales and marketing positions, the spokesman said. The hiring planned for 2004 is was twice the approximately 700 new positions created in 2003.