French telecom services provider, SFR plans to reduce its workforce by as much as 5,000 between 2017 and 2019, according to Reuters. SFR was earlier acquired by Billionaire Patrick Drahi from Altice. At the time of acquisition, Drahi had promised no redundancies till 2017. SFR currently has 14,300 employees.
French market is trying to come to terms with a price war that is going on since the entry of Free Mobile in 2012. Any attempt to bring down the workforce is likely to face stiff opposition from the unions as well as from the French Government. Socialist French Government is under pressure to bring down unemployment rate, especially before the next year’s Presidential election.
Price war means that the margins are coming down for all the service providers. Another French operator, Bougyes Telecom was forced to bring down its workforce by 2,000 jobs since 2013 through voluntary programmes. Similarly Orange has also reduced its workforce from 102,000 at the end of 2013 to 96,000 in June this year. The company has achieved this by not replacing its retiring workers.
SFR’s move to reduce its workforce comes at a time when any hope of consolidation failed in the French market after Orange failed to acquire Bouygues Telecom earlier this year. Price war is having a detrimental effect on the industry and consolidation would have helped in resolving the problem. There are four major telecom service providers in the French telecom industry.
SFR has been facing a number of issues since it was acquired by Drahi in 2014. It has been losing customers since the acquisition though the company has increased its spending on network upgradation.