SFR won the approval of labour unions for a plan to cut around one third of its domestic workforce by mid-2019.
The French operator, which is owned by Altice group, negotiated with unions over the release of 5,000 staff between mid-2017 and mid-2019, Bloomberg reported, noting that SFR’s share price was boosted by the announcement of the agreement.
SFR’s headcount reduction programme will shed around €400 million ($443 million) per year from the operator’s costs, Bloomberg reported citing a Les Echos article. Sources told Bloomberg the redundancy package could cost SFR between €300 million and €1 billion, depending on the seniority of staff involved.
The operator plans to offer workers compensation equalling two-and-a-half months per year worked on average, the news agency reported.
An SFR spokesperson told Bloomberg that the company will honour a commitment Altice made to unions not to reduce staff numbers for a period of three years after it acquired the French mobile operator in 2014.
However, Reuters reported that SFR will cut its first 1,000 jobs in 2016, with the remainder to be shed over two years from mid-2017 onwards. French broadsheet Le Monde also cast doubt on Altice’s job’s pledge in a recent report that stated SFR has effectively cut 1,200 jobs in the past two years by not replacing staff that have left the company.
SFR’s agreement with unions also represents something of a turnaround, after Le Monde previously reported that the goal of cutting 5,000 jobs in total had been a “bombshell” to union representatives when the plan was first unveiled in late July.
The operator and its parent are due to reveal second quarter earnings on Tuesday, Bloomberg reported. Results from SFR’s domestic rivals suggest that France’s mobile market remains challenging, and ING analyst Emmanuel Carlier told Bloomberg that cost cutting will play a key part in an expected rebound in Altice’s earnings in the second half of 2016.
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