Bouygues Telecom, which runs the third-largest mobile operator in France, announced plans to cut its workforce by more than 1,500 as hopes of consolidation in the country’s fiercely-competitive mobile market were dashed this week.
Iliad, the owner of smallest French mobile operator Free, failed to strike an agreement to take over Bouygues Telecom. Talks between Iliad and Orange have also reportedly floundered.
Arnaud Montebourg, France’s economy minister, repeated his call to reduce the number of mobile network operators from four to three.
Speaking at a telecoms conference organised by Les Echos newspaper, and quoted by Reuters, Montebourg said he wanted to bring to an end the “destructive spiral” of falling prices. “I am calling on all players to find other solutions than job cuts.”
Bouygues is struggling in the French market. In the first three months of 2014 the operator racked up an operating loss of €19 million.
In a statement, Bouygues, announced a “transformation plan designed to secure an independent future” after a shareholding meeting.
On top of the job cuts, which represents around 15 per cent of the company’s 9,000-strong workforce, Bouygues said it would continue to invest in 4G and be “very aggressively-priced” on fixed broadband, as well as strengthen customer support. Stores are to be modernised, while in-store employees and customer advisers are not to be affected by the redundancy plan.
Bouygues said job cuts were part of plans to achieve annual cost savings of €300 million by 2016. The operator has already achieved €600 million in annual savings over the past three years, according to the Financial Times.
The re-organisation, said the operator, would take shape from 2015 and allow the company to emerge as a “viable and credible player”.