Bouygues Telecom cuts jobs in fight to stay competitive
12 June 2014 | Kavit Majithia
Bouygues Telecom is planning to cut over 1,500 jobs, as talks of a possible takeover by either Iliad or Orange hit a standstill this week.
Bouygues will cut 15% of its 9,000-strong workforce in a bid to stay competitive in France. The decision came after meeting with unions in the country.
The move has led to doubts over whether French telecoms will now consolidate to three players, with Bouygues now likely to remain in the market.
Leading executives in France are hoping for consolidation to end a price war that has persisted in the country and hindered the leading players for over two years.
Bouygues is looking to cut costs by €300 million by cutting 1,516 jobs. The group has called the plan “transformational”, and revealed plans to launch a range of fixed-line and internet services with aggressive pricing strategies.
“Bouygues has decided to totally rethink its positioning of the business,” said a company statement.
Low-cost mobile operator Free shook up the French market when it launched operations in 2012, with Bouygues significantly affected by the move.
The French government has also added to the pressure of consolidation, with French economy minister Arnaud Montebourg stating recently that consolidation will help protect jobs and leave companies with more room to develop infrastructure.
“We cannot continue with today’s frenzied competition and some of the lowest prices in the world,” he said.
It appears Bouygues is now determined to continue operating as a separate entity for the time being, and the company is reported to have said this week that it is “pursuing a standalone strategy”.