FT to shed 17,000 jobs

14 Feb 2006

France Télécom (FT) yesterday announced plans to ramp up the group’s ongoing restructuring, include proposals to shed 17,000 jobs worldwide, as it posted a 2.8% rise in full-year earnings, which was broadly in line with market forecasts. The French giant reported EBITDA of EUR18.42 billion in the twelve months to 31 December 2005, up from EUR17.92 billion in 2004 and in line with Reuters’ consensus forecast of EUR18.46 billion. The telco’s net profit increased from EUR3.21 billion to EUR6.36 billion, as a result of lower tax and interest fees and one-off gains of EUR1.4 billion relating to divestments and tax deferrals. Sales climbed 6.2% to EUR49.04 billion aided by its takeover of Spanish mobile operator Amena and ‘positive currency effects’, while revenues on a comparable basis rose 2.5% as weak results from fixed line operations in France and Poland were offset by strong gains in its ADSL and mobile businesses. The telco’s gross margin dipped from 38.2% to 37.6%.

For 2006, FT expects sales to rise by 7% (on a published basis) and 2% (on a like-for-like basis), and is targeting underlying cash flow of EUR7 billion. The group plans to cut 16,000 jobs in France and 1,000 overseas between 2006 and 2008 – or roughly 8%-10% of its workforce – but stresses that the cull would not involve forced redundancies.

France, Orange Group