Future not Orange for 17,000 employees

The owner of mobile phone operator Orange today said it will axe 17,000 jobs in a bid to reduce costs.

State-owned France Telecom said it will cut around 8.5% of its 200,000 staff worldwide by the end of 2008.

Nearly all of the job losses – 16,000 – will come in France and it is not thought there will be any in the UK, where the company employs 12,000 people at Orange and 3,500 at broadband provider Wanadoo.

A France Telecom spokeswoman said: “There will be 1,000 job cuts outside France but the number of employees in the UK is going to remain stable.”

France Telecom has shed a similar number of jobs in the past three years in an effort to cut costs.

The news came as the company said revenues for Orange in the UK were up 0.8% to €5.8bn in 2005 after its customer base grew 4.5% to 14.9 million by New Year’s Eve.

France Telecom took full control of Orange in April 2004 after splashing out £31bn (€45bn) for a majority stake in 2000.

The company said group revenues were up to €49.04bn in 2005 with the help of a sharp increase in broadband take up through its businesses such as Wanadoo.

Earnings grew 2.8% to €18.42bn, which sent net income up 98% to €6.36bn.

France Telecom is the second largest mobile phone operator in Europe behind Deutsche Telekom but it has seen its shares slip 10% in 2006 and 23% in the past 12 months. The stock was up 3% following today’s announcement.

A number of mobile phone operators in the UK are under foreign ownership, including T-Mobile which is run the Deutsche Telekom and 3 which is run by Hutchison Whampoa.

The UK telecoms sector – like banking – is susceptible to cross-border takeovers because only a handful of large firms dominate the market and are prevented from bidding for each other by competition rules.

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