Bouygues Telecom's future questioned by unions, with more job cuts expected

French trade unions are questioning whether Bouygues Telecom's financial deterioration will trigger another reorganisation, leading to further job cuts.

A report commissioned by a committee of union heads claims that the 556 voluntary job cuts announced by Bouygues Telecom's management two months might not be enough. The study says that another round of cuts should be expected in the near term as the company attempts to reshape the organisation following its announcement that profits fell 55 per cent in the first half, according to La Tribune.

Union boss Bernard Allain says the report confirms his fears that first surfaced earlier this year. "The [French mobile market] has changed, and the company is facing a deterioration in its results," he told La Tribune.

According to the union official, the report considers the original action plan unveiled by the management as "not sufficiently long-term, with uncertainties remaining beyond this initial reorganisation plan," according to La Expansion.

Allain adds that Bouygues Telecom's internal projections indicate that market instability will continue through next year, and that the entrance of Iliad's Free Mobile has introduced a new business model that completely changes the investment climate.

However, Allain says that Bouygues Telecom's problems are not only due to Free Mobile's aggressive marketing, but that the company has thrown money away on unnecessary projects and on a €1.25 billion share repurchasing scheme.

Bouygues Telecom, which has around 10,000 employees, announced its first cost-savings plan in February with a commitment to cut €300 million from its operating expenses. This was followed in July with the news that it planned to reduce its workforce by 556.

In September, Bouygues Telecom was reported to be in final negotiations to sell its wireless masts to Antin Infrastructure Partners in an effort to reduce its debt mountain. The company is looking to sell almost 2,300 masts for around €200 million.

For more:
- see this La Tribune article (translated via Google Translate)
- see this L'Expansion article (translated via Google Translate)
- see this Telecom Paper article (sub .req.)

Related Articles:
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France Telecom slows customer losses in Q2 as Free roaming deal boosts results
Bouygues CEO wants to end Orange/Free Mobile roaming deal
Report: SFR, Bouygues plan job cuts amid tough low-end competition

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