FRANCE TELECOM FINALLY CATCHES UP WITH THE REST OF EUROPE.

France Telecom is the last major operator European to launch a restructuring plan, taking again same painful measures as its competitors: drastic cuts, reductions in manpower and recapitalisation. Under a long-awaited Euro 45 billion restructuring plan, France Telecom will shed 22,000 jobs, issue more stock and reschedule debt payments. The package includes Euro 9 billion in funding from the French state, which owns 55% of the struggling telecom operator. France Telecom intends to make Euro 15 billion in savings between 2003 and 2005 to pay off its debts, according to the restructuring plan officially presented to the press on December 5 by chairman Thierry Breton. Its total debt stands at around Euro 70 billion. The job cuts, the most delicate of the savings, was softened by Mr Breton, who announced freeze on recruitments over six months and confirmed the departure of 22,000 people in three years, or 15.7%. The transfer of the France Telecom officials to other civil service entities is the favored approach to cutting personnel, but on a voluntary basis. Civil servants' jobs are protected by law, making massive job cuts difficult. Orange, the mobile subsidiary of France Telecom, has already cut 700 to 800 jobs. But the recovery programme is less severe than a number of plans launched by its competitors.

Dutch operator KPN cut 11,000 jobs from more than 49,000 between mid-2000 and at the end of 2001, and Britain's BT cut staff by 21% in 12 months. Deutsche Telekom intends to lose 42,500 jobs in Germany and more than 12,200 abroad by 2005. The operator negotiated with the trade unions the creation of a "agency of personnel " in order to reclassify part of those laid off. The plan announced by France Telecom has a "weak social element" and Thierry Breton seems "to want more...

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