Report: Bouygues Telecom faces massive job cuts after failure to buy SFR

The failure of French conglomerate Bouygues to secure SFR looks set to have severe repercussions for its telecoms unit, as latest reports suggest Bouygues Telecom could lose nearly 23 per cent of its workforce.

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Martin Bouygues, CEO, Bouygues Group

According to French daily Le Figaro, French unions fear that between 1,500 and 2,000 jobs will be cut from the operator's 9,000-strong workforce as a direct result of the failure to acquire SFR.

Bouygues Group lost the battle to buy SFR in April when current owner Vivendi decided to sell the operator to Altice, which in turn plans to merge it with cable operator Numericable. This was a huge blow for Bouygues CEO Martin Bouygues, who had pulled out all the stops in an effort to secure a deal.

French union representative Alain Bernard from Force Ouvrière (Workers' Force) told the paper that the axe should fall before the summer once a savings plan has been worked out. He added that nothing is expected to be announced before the European elections on May 25.

Bouygues Group said it had no comment on the report.

As Le Figaro pointed out, there are plenty of economic reasons to support the job cuts: Bouygues Telecom has suffered the most from the cheap mobile deals offered by Free Mobile and has seen its turnover fall by 26 per cent over two years, while costs have increased by 10 per cent.

The paper added that Bouygues Telecom has also lost 200,000 customers in the same period and saw ARPU drop as 18 per cent of its customers chose its cheaper B&YOU offers, which were launched in response to the Free Mobile tariffs.

Meanwhile Bouygues Telecom has also launched an attack on fixed prices by offering €19.90 ($27) home broadband and TV plans, although this also saw the company drop its multi-play Ideo bundles. That means it is no longer able to compete with the Orange Open and SFR Multi Pack plans that bundle together fixed and mobile plans.

At present, Bouygues Telecom is working on reducing its operating costs by simplifying its offers, pushing higher-value plans and even potentially moving its HQ to a cheaper location. It also expects the network-sharing venture with SFR to help reduce the costs of its LTE network investments. Nothing further has been said about a potential tie-up with Iliad, the owner of Free Mobile.

Bouygues is set to present its group results on Thursday May 15.

For more:
- see this Le Figaro article (in French)

Related Articles:
For European telecoms operators, 4 is a crowd
Vivendi rebuts claims by Martin Bouygues of 'anomalies' in SFR process
France to review Numericable-SFR deal, pursue more mergers at home and in Europe
After SFR, Bouygues Telecom's future could lie with Iliad
Altice to buy Vivendi's SFR for €17B

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