Didier Lombard quit post after criticism of his handling of a spate of suicides among employees
The former chief executive of France Telecom has been placed under formal judicial investigation over workplace bullying after a spate of suicides at the phone company and its subsidiary Orange, in what could become a landmark criminal trial.
Didier Lombard stepped down as head of the company in 2010 amid criticism of his handling of the suicide crisis; about 35 staff killed themselves in 2008 and 2009.
Unions had blamed a culture of bullying that permeated the company and made a mockery of the slogan: “The future is bright, the future is Orange.”
Harrowing details emerged of the mental anguish of staff who killed themselves, including one who set himself alight in front of his office in western France. Some workers left notes blaming unbearable work pressure, bullying and “management by terror” while scores of other staff, from senior technicians to staff who worked processing bills, were saved as they attempted to kill themselves. One worker was found unconscious after taking an overdose at her desk.
Unions complained of a culture of fear and depression, where managers did not take staff mental health seriously. Some union officials said the company had intentionally created a stressful work environment to push employees into quitting in order to reduce its labour force and thereby cut costs.
During the crisis over the number of staff deaths, Lombard caused outrage by referring to it as a “suicide trend”. He is now accused of advocating tough management practices amounting to psychological harassment.
The legal case is a first in France because Lombard is not being singled out for personally targeting individuals but for presiding over a collective managerial bullying approach that spread across the company. It is the first time a French chief executive has been placed under judicial investigation in a workplace bullying case.
Other senior staff are to be interviewed by judges as unions wait to see if the company, a former state-owned monopoly which is now in private hands, will be held responsible for the workers’ deaths.
“I forcefully reject the idea that [restructuring] plans vital to the survival of the company might have been the cause of human tragedies,” Lombard has written in Le Monde newspaper, saying he was innocent.
Lombard’s lawyer said: “Mr Lombard is being accused of harassment against people that he never met. That is a stunning accusation.”
In February 2010, government labour inspectors said a restructuring plan that sought to reduce the company’s headcount by 22,000 and put 10,000 other workers in new positions had a “pathological effect” on staff morale.
One worker in Troyes was so desperate over the pressure of forced moves that he stabbed himself in the stomach during a meeting. Others killed themselves at their workplace, some in the middle of the working day.
One 51-year-old who had a senior job working on Orange’s networks wrote before his death that the “only reason” he killed himself was work: “I have become a wreck,” he wrote.
Call centre workers said they had to ask permission to go to the toilet and file a written explanation for going one minute over a lunch break. Senior staff described being subjected ti bullying and being repeatedly forced to move job.
The long-running judicial investigation is being followed closely in France, where unions are particularly sensitive to workplace suicides after patterns of staff taking their own lives at car makers Renault and Peugeot and the electricity company EDF in recent years.
Two other former senior executives at France Telecom have been summoned by investigating magistrates.
Tom Alexander in talks with buyout firms KKR and Apax to raise funds for deal that could involve France Telecom in joint venture
Former Everything Everywhere chief executive Tom Alexander’s daring £8bn bid for his ex-employer, the UK’s largest mobile phone company, could take the form of a joint venture with France Telecom.
Alexander has been in detailed discussions with US buyout company KKR, whose British assets include Alliance Boots and Pets at Home, and British firm Apax Partners about retaking control of Everything Everywhere and its Orange and T-Mobile networks.
Sources close to the talks said the approach could involve an offer for the whole company or a deal to buy out France Telecom’s existing joint venture partner Deutsche Telekom, which is looking to raise cash and is thought to be ready to withdraw from the UK.
The option of floating Everything Everywhere was suggested by France Telecom finance officer Gervais Pellissier last week. He told reporters at a conference: “If EE is really on the right track in terms of synergies and if we can make a good case to investors, we might look at listing. But the partners need to distinguish between the short-term value we could get from an IPO or a sale, and the long-term value of being number one in the UK for the two companies.”
Sources said the possibility of stock market listing was remote, but that with EE’s owners often at loggerheads over branding and strategic direction, retaining the status quo was not an option.
If Alexander succeeds in acquiring the entire company, the deal would dwarf Guy Hands’ £4.2bn takeover of music major EMI and would rival KKR’s £11bn acquisition of Alliance Boots, the largest buyout ever completed in the UK.
The £8bn being raised for the deal is six times EE’s underlying earnings and mirrors the valuation placed on Orange Switzerland, which was bought by Apax for £1.2bn in December.
It is thought KKR and Apax could be willing to stump up £3bn of equity for the bid, with the rest needing to be raised from banks. A source said the £5bn balance was too large for British debt markets to swallow and that US lenders were being approached.
Apax and KKR declined to comment, while an Orange group spokeswoman said: “France Telecom clarifies that no offer from a third party to acquire the business in the UK has been received nor has one been invited.”
Alexander spearheaded the merger of the UK arms of France’s Orange and Deutsche’s T-Mobile brands, announced in 2010, creating the country’s largest network with 27 million customers and promising £3.5bn worth of savings over five years.
He was responsible for the merged company’s much derided corporate identity, and implemented the decision to retain both network brands. A classic car racing enthusiast, Alexander’s internal documentation at the time suggested the company would function like Volkswagen, which houses a range of brands from Bentley and Lamborghini to Skoda.
However, the hoped-for cost savings were slow to materialise and he presided over a drop in new customers and a decline in earnings. In July last year, the founder surprised the city by announcing he was leaving “for personal reasons”.
“The figurehead for the deal, Tom Alexander, is an odd choice given that he was allegedly seen to have failed once in his management role at EE,” said analysts at Espirito Santo bank in a note to investors which put a £10.6bn valuation on the company. “Certainly, the performance of EE under Olaf Swantee has been markedly better.”
A former EE executive who asked not to be named described the merger as “a forced marriage”. “It was like two ships colliding. There was this enormous noise about this colossus shaking up the marketplace and two and a half years down the line nothing has largely changed.”
The necessary cuts took time to implement. EE had hoped to make savings by dismantling 9,000 masts, but due to various delays including a legal challenge from Mundio, a mobile virtual network operator that rented airspace from T-Mobile, the process took two years to kick in.
And EE is paying to compete with itself. Hundreds in commission is paid every time one of its resellers switches a customer from T-Mobile to Orange or vice versa.
The picture began to improve in September under Alexander’s successor, former France Telecom executive Swantee, who cut his senior management team in half on his first day and went on to slash 600 jobs.
Alexander has been a dominant figure in mobile telecoms for 25 years. A BT Cellnet executive until 1998, he left to found Virgin Mobile, one of Britain’s most successful virtual mobile networks which merged with NTL and Telewest to form Virgin Media in 2006. He retired for two years to concentrate on his racing career before being persuaded back to head Orange in the UK in 2008.
Alexander’s bid may reunite some of the team he worked with in previous roles at Virgin Mobile and Orange. Among the directors culled by Swantee was chief commercial officer Andrew Ralston. In February Ralston formed a company with Alexander called Sulis Ventures, which is understood to be a telecoms consultancy.