The telecoms industry was dealt a fresh blow yesterday after Equant, the high-speed network provider, said it was slashing 3,000 jobs as part of its takeover by France Telecom's Global One unit. Separately, Sonera, the Finnish telecoms operator, said it was cutting 1,000 jobs in response to tougher conditions.
Equant, which is reducing its workforce by around 20 per cent, said about 1,500 of the planned job losses would take place by the end of this year.
The company, which has already announced it hopes to find at least $300m (£207m) of savings a year, said the workforce reduction would save it $100m a year. However, it will have to take a one-off charge of $40m to $50m to cover the move.
"When we announced completion of the merger – less than two months ago – we committed ourselves to a rigorous timetable for integrating the organisations involved," Didier Delepine, Equant's president and chief executive, said.
Mr Delepine added: "The action we have announced today is consistent with that goal and indeed the underlying rationale for the merger – full realisation of the significant cost synergies it promises. Decisions such as these, while difficult, are nonetheless essential for Equant to maintain and strengthen its leadership position in the corporate data market."
Separately, Sonera, which employs around 11,000 workers, said it hoped to save 50m euros (£31.6m) to 60m euros a year from its cost cutting, a move which will force it to take a one-off charge of 5m euros this year. It believed part of the staff reduction would occur through normal turnover.
"The changes are the result of the decline in the economic outlook of the industry," Sonera said, adding it did not think the job cuts would have a substantial impact on the company's revenues in the near future.
The Finnish telecoms group also said it would cut back on other expenses as well as focus on reducing its 5.1bn euro debt pile. It is due to repay a 3.25bn euro debt facility this October.
Nevertheless, the credit-rating agency Moody's cut its short-term credit rating to the lowest investment grade due to liquidity concerns. The agency said its long-term Baa2 rating for Sonera remained on review for a downgrade.Reuse content