Top France Télécom executives on trial for ill-treatment of employees

The France Télécom trial that opened in Paris on Monday and continues until July 12th is a lesson in the human cost of competing in a deregulated, cut-throat, digital world. It marks the first time that top executives of a company on the French bourse are being prosecuted for ill treatment of employees, and is believed to be the first such trial in the world.

The case concentrates on the years 2008 and 2009, when 35 France-Télécom employees took their own lives. Trade unions say the toll was much higher. Two investigating magistrates examined in depth 19 suicides, 12 attempted suicides and eight clinical depressions.

The 673-page referral order drawn up by the magistrates accuses Didier Lombard, the former CEO of France Télécom, his deputy, Louis-Pierre Wenes, and then head of human resources Olivier Barberot of moral harassment, which is punishable by one year in prison and a €15,000 fine.

Four lower-ranking executives stand accused of complicity in moral harassment. France Télécom changed its name to Orange in 2013, but the former company is also being prosecuted as a “moral entity”.

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The French telecommunications sector was deregulated at the end of the 1990s. France Télécom was privatised in 2004, with a heavy debt burden. It faced severe competition from new operators such as Free and later SFR, and was struggling at the same time to adapt to the digital revolution. By the autumn of 2006, voice traffic on landlines collapsed. The accused cite this context in their own defence.

Drive them out

English is trendy in French business circles, so Lombard, the CEO, baptised his strategies to streamline France Télécom “Next” and “Act”. He ordered the suppression of 22,000 of the company’s 120,000 jobs, and created 6,000 jobs in new technology. Two-thirds of employees enjoyed the status of civil servants, who cannot be made redundant under French law. So top management decided to drive them out.

Managers with high “win ratios” were given bonuses for eliminating the most jobs. Employees who had occupied the same position for three years were placed on a “time to move” list and ordered to find themselves another job within the company.

If employees ignored exhortations to resign, they were uprooted and transferred to distant parts of the country. Some had their salaries decreased, were assigned to positions they were not trained for, or were demoted from prestigious jobs to answering phones in call centres. It was not uncommon for an employee to arrive at the office and find his chair had been removed.

Le Monde’s judiciary correspondent, Pascale Robert-Diard, likens the list of names, dates and causes of death in the charge sheet to those engraved on war monuments in French villages. The majority of the 19 victims in the case studies hanged themselves. Four jumped, one each from a window, a bridge, a motorway overpass and a viaduct. One threw himself under a train and one self-immolated in front of a France Télécom building. One swallowed a fatal mix of pills and alcohol.

Most left messages blaming the company for their act of desperation. “France Télécom is responsible for my suicide,” said a letter by a technician in Marseille. “Permanent urgency, overwork, lack of training … management by terror.”

The investigating magistrates concluded that “the effects of this policy… created or accentuated among many employees suffering which manifested itself in various forms, the most dramatic being the act of suicide.”

Crass

In light of the results, past quotes by the three top officials seem particularly crass. “We have to go fast, fast, fast,” the executive director, Wenes, said at a management conference in Paris in October 2006. “You must think constantly what you can do to go faster. When you go fast, you can get there before the competitor.”

At the same conference, Lombard, the CEO, said the company had to “stop being a mother hen… You have to realise we can’t protect everyone anymore. In 2007, I’ll make people leave, one way or another. Out the window or out the door.”

Barberot, the human resources director, admitted that “changing [professional] fields is like gymnastics. If you don’t do it before the age of 40, it’s hard… We can’t fuss over details.” Barberot suggested using “psychological mechanisms” including frustration to push employees to leave.

Ruthless policies

Objectively, the trial referral order notes, Lombard’s ruthless policies succeeded. He obtained his goal of 22,000 departures, 10,000 transfers and 6,000 new, hi-tech recruits, and created a € 7 million cash-flow. “If one forgets the people who worked in the company, Didier Lombard’s 2006 speech was visionary,” the magistrates wrote.

Amid mass coverage of the trial’s opening, the economic daily Les Échos was the only newspaper to express reservations about the precedent it is setting. The case will be of crucial importance to other companies facing stiff competition and rapidly evolving technology, it warned.