French mobile service provider, Bouygues Telecom, has revealed that it will slash its workforce by 1,516 employees in order to ensure its survival as an independent entity. The transformation plan comes as a result of the financial problems French mobile operator has been having since 2012.
The company’s first quarter earnings showed an operating loss of €19 million. As part of its restructuring strategy, Bouygues plans to incorporate a threefold approach by creating “new usages and mobile internet by continuing to invest in the mobile network”, promoting offers that are “aggressively-priced, technology-packed” throughout the year, and providing improved digital services along with “high-quality support” to its customers.
Since March, Bouygues Telecom has attempted to ensure its continued existence by approaching Vivendi with a plan to merge with its mobile network, SFR. Bouygues continually increased its bids, which included a cash offer of €15 billion, an earn-out clause of €500 million and a 10% equity interest. The total bid amounted to €16.5 billion.
However, despite their best efforts, Vivendi chose the cable and telecoms company, Numericable, which offered just €13.5 billion in cash, but improved their bid by adding an earn-out of €750 million and a 20% stake in the new joint venture.
Furthermore, Vivendi was given the option to sell its claim in the company in the future. In the end, their offer totaled €17 billion. Bouygues has estimated that its restructuring plan will be completed by 2015. Its hope is that the changes will make Bouygues “a viable and credible player” in the French mobile market.