When Stéphane Richard appeared recently in Paris, a celebrity and news magazine, lightly tanned in an open-necked shirt and leaning jauntily against the corporate logo of his new firm, France Telecom, he raised eyebrows in the buttoned-down world of French telecoms. Mr Richard did not attend the elite engineering school which produces almost all of France’s senior telecoms executives, including his predecessor at France Telecom, Didier Lombard, and the boss of Vivendi, a rival. Instead, he is a political operator who has made a fortune in property. He is a friend of Nicolas Sarkozy, France’s president, and worked until recently as chief of staff to the finance minister. He became boss of France Telecom with the immediate task of responding to a wave of suicides among employees which had prompted a political outcry.
Since 2008, over 30 France Telecom employees have killed themselves, some explicitly blaming the company. Even though the firm’s suicide rate is in line with the national average, France Telecom says that it was partly to blame. Because of the group’s former status as part of government, 66, 000 or 65% of its employees are classed as civil servants, with guaranteed tenure. Unable to fire them, France Telecom instead subjected them to a system called "Time to Move", in which they were obliged to change offices and jobs abruptly every few years.
"The former management needed to change the nature of peoples’ jobs due to technological change and increased competition, " says Mr Richard, "but the company underestimated the consequences. " For the first time in 15 years, he has promised, France Telecom will expand its workforce. Job and office moves will become voluntary, and up to 30% of the variable pay of the firm’s top 1, 100 managers will be tied to their "social" performance. Other measures include making France Telecom’s numerous offices more pleasant: the company will renovate 800 of its buildings and create 270 new "conviviality spaces" for employees.
Mr. Richard, a former board member, joined the firm in 2009 as heir apparent to Mr Lombard, with the blessing of the government, which still holds a 27% stake. He was not due to take over until next year, but the handover was accelerated in the midst of the crisis. In an unusual outburst last week, Louis-Pierre Wenes, the group’s former deputy chief executive, who resigned under pressure last year, told a British website that "external stakeholders" in France Telecom had taken advantage of the suicides to advance their agenda. Mr. Lombard was not close to the current administration, whereas Mr. Richard is.
Minority shareholders are now waiting to hear in detail what Mr. Richard plans for the business beyond improving morale. He is a talented communicator, but some foreign investors grumble that despite having been at the firm for over six months, he tends to turn to other executives when asked for precise details on France Telecom’s financial performance. But Mr. Richard clearly has lots of business nous. The grandson of a shepherd, he made his fortune from a leveraged buy-out of a property developer, Nexity, in 2000-01. He is likely to push France Telecom into behaving like a private firm, and further away from its past as a public monopoly.
"Stéphane Richard is far more attuned to the market than Didier Lombard, " says Xavier Niel, founder of Iliad, a young telecoms firm which has upended the French broadband market. "Under his management France Telecom will become a more dangerous competitor for us." Already, while at the finance ministry, Mr. Richard demonstrated a strong belief in the beneficial effects of competition by helping Iliad obtain a mobile licence in the face of fierce resistance from the incumbents and their political allies. The word "nous" in Paragraph 5 probably means