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France Telecom Names Richard CEO; Lombard to Remain Chairman

February 01, 2010, 03:44 PM EST

By Matthew Campbell

Feb. 1 (Bloomberg) -- France Telecom SA, seeking to end turmoil at the company rocked by a series of employee suicides, said it will name Stephane Richard chief executive officer, while Didier Lombard will remain chairman.

The plan to split the roles of chairman and CEO will be recommended to the company’s board on Feb. 24 and, if approved, will be effective March 1, France Telecom said in an e-mailed statement.

Thirty-four France Telecom employees have committed suicide since January 2008, actions unions and government ministers have linked to stress caused by reorganization that the company put in place to deal with intensifying competition in the telecommunications industry. Chairman and CEO Lombard attempted to restructure France Telecom to better compete with rivals including Deutsche Telekom AG and Vodafone Group Plc.

“The number one thing for Richard is to put a line under the suicides issue and make a pact with the unions to basically get the labor force behind France Telecom again,” said Michael Kovacocy, an analyst at Daiwa Capital Markets in London. “France Telecom still has to cut costs, but it’s a lot easier to do that when you have the workers on your side.”

With the proposed management change, Lombard will direct the group’s strategic and technological matters. Richard, currently the deputy CEO and anointed successor, will take over management of the group’s operations, especially the “deployment of the new industrial project as well as the new social contract,” the company said in the statement.


‘Positive Atmosphere’


“The crisis that shook us in 2009, me the most, is on the way to being eased,” Lombard said today in an interview with Le Figaro newspaper. “The different social channels are advancing because dialogue with the unions is constructive. The atmosphere is positive.”

Last October deputy CEO Louis-Pierre Wenes resigned over the suicides, after unions demanded his ouster. French Finance Minister Christine Lagarde had met with Lombard to express the government’s concern at the suicides. France Telecom is about 27-percent owned by the state.



--Editors: Vidya Root.


To contact the reporter on this story: Matthew Campbell in London at +44-20-7073-3165 or mcampbell39@bloomberg.net.


To contact the editor responsible for this story: Anthony Aarons at +44-20-7673-2227 or aaarons@bloomberg.net.

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