Counting the costs

Nicknamed the ‘cost killer’, France Telecom’s former Deputy CEO Louis- Pierre Wenes became one the most hated men in France after 25 workers committed suicide under his leadership. Here, the man widely blamed as the mastermind behind the company’s aggressive restructuring plans attempts to defend the actions that led, ultimately, to a human tragedy.

“If we look at the facts, the suicide rate at France Telecom did not increase during that period.”
-Pierre Wenes

For France Telecom, the suicides of 25 workers in just 20 months represented an unparalleled PR disaster. The organisation became synonymous with draconian management practices and extreme workplace stress – and Louis-Pierre Wenes, its former Deputy CEO, became one of the most hated men in France. Nicknamed the ‘cost killer’ he was dubbed the mastermind behind France Telecom’s aggressive restructuring plans aimed at achieving €1.7 billion in savings by 2011.  Around 22,000 workers have been laid off by the company since 2006 as part of a modernisation drive following the company’s privatisation in 2004.  The latest cost savings put workers under excessive pressure, claim unions who cited relentless monitoring of staff and repeated transfer programmes among the measures that drove 25 workers to take their lives – including several who jumped to their deaths from France Telecom buildings, a worker who stabbed himself in the stomach during a work meeting, and a call centre worker who overdosed on barbiturates on the office floor.

The tragic human cost of these restructuring measures led to Wenes’ resignation in October last year, when he expressed apparent regret for the consequences of France Telecom’s actions, telling media: “Despite the hard edge of the technological and economic fight, especially in our business, nothing can justify men and women putting an end to their lives. Today, like before, I cannot accept it.” A letter later sent to France Telecom staff and translated by the Wall Street Journal states: “My sense of self-restraint often prevented me – perhaps wrongfully – from expressing what I felt and better explaining what I was doing. To everyone who suffers, I hope you will find serenity and confidence.” Such emotive language represents a sharp U-turn from the Machiavellian figure painted by the French media and the country’s trade unions.

Behind the mask

So who is the real Louis-Pierre Wenes? Ruthless ‘cost-killer’ or a misunderstood manager pushed to the brink by his organisation’s relentless fight for survival?  When Business Management meets Wenes and questions him on the scale of the suicide tragedies, there is nothing in his tone to suggest the latter. He is unapologetically pragmatic about the situation, claiming there is in fact no direct correlation between the suicides and France Telecom’s restructuring programme: “Of course a suicide is always something dramatic. That somebody ends his life is really something that makes me feel very, very bad and we have to do everything we can to avoid that. We’d been doing a lot of things even before this came into the media, like putting in place doctors in different regions of France almost 18 months before. If we go back to the number of suicides you mentioned, I think it’s a biased view of the situation. If we look at the facts, the suicide rate at France Telecom did not increase during that period.

You could see the number of people committing suicide in 2000 was even higher at that time and moreover the rate was absolutely similar to that of the overall corresponding French population. We [France Telecom] had 120,000 people. It’s 16 [suicides] a year. It’s far too much but these are the facts. A lot of things have changed since and unfortunately people are still committing suicide.  The fact of the matter is that if you go through such a large transformation you will create stress at individual levels but it’s normal.”

In, fact, he seems to suggest that darker forces were at work when it came to be the way the situation was perceived by the media, the French public and the trade unions, and describes himself as having been made a “scapegoat” by “external stakeholders”.

“I don’t want to underestimate the situation but what I’m saying is it was not a France Telecom specific issue as such. So you must then ask yourself how did it come [to be perceived] that way?  In my opinion it was because a certain number of external stakeholders had their own personal agenda and it’s always very easy to play on people’s emotions. I cannot even admit to thinking that some people took advantage of the situation to achieve their personal agenda but that’s for sure what happened.” Describing how he was made a “scapegoat” he says: “It’s very unpleasant being a scapegoat. You’re sure you’ve been doing the right things then you’re stabbed in the back for reasons, I mentioned before. A lot of these reasons had nothing to do with the business itself. It’s like you’re running a race and suddenly somebody hits you in the back and you fall over.”

A necessary evil?

Backstabbing, office politics and scapegoating aside, Wenes says France Telecom had little choice but to drastically adapt its business model from one driven primarily by the traditional fixed line business – to one embracing the internet revolution.

Jobs were inevitably in the firing line with many skills becoming redundant. Ongoing restructuring had been taking place within the company since it was privatised in 1998. Since then 40,000 jobs have been cut as the company battled to modernise itself. “France Telecom was built on the traditional fixed lined phone business,” says Wenes. “That accounted for almost 80 percent of its revenues and now it’s about 25 percent. We had jobs that were just disappearing because we’d been moving to being an internet business. Some jobs which existed before did not exist the next day. Between 2003 and 2008 almost 50,000 people left the company on a voluntary basis with packages that were significantly above the industry average. We also had 15,000 people who changed their jobs, moving from being technicians to the business side for instance.”

But it was the manner in which these changes were enacted that union leaders say led to the 25 suicides.  They have accused France Telecom’s management of running a “reign of terror”, which involved culling staff and forcing those remaining to switch jobs, or meet overly tough new targets. The company also had a programme whereby managers were placed in new postings every three years. Wenes has been portrayed by union leaders as the main proponent of the regime. Pierre Morville, a  CFE-CGC Union member told the news agency AFP shortly after the deputy CEO’s resignation that: “Wenes is symbolic: he was responsible for terror management tactics. He had to leave.” Meanwhile CFDT union member Pierre Dubois told France 24 that Wenes was insensitive to the employee suicides and that he refused to negotiate on the policy of forced transfers. “There was never any kind of dialogue with Wenes.

He never agreed to meet us, not until we published an open letter calling for his resignation.”
Many of those who remain in the workforce have civil service status – a throwback from the company’s existence as a state-run company. Union leaders say that while it is virtually impossible for France Telecom to let these workers go, management have resorted to bullying tactics in a bid to force workers to quit by placing them in high pressure call centre jobs from previously skilled roles.

Wenes says the company had no choice but to make fast decisions on workforce changes in an economic environment which left little room for manoeuvre: “We are in an environment which is more and more constraining. The glorious gross years are over and this makes the room for manoeuvre for managers much narrower than it was. So the speed now at which you must react and counteract and analyse what’s going on is critical. The world is changing fast and if you try to implement the former recipes you will probably fail because the environment is so different to yesterday’s.” He goes on to say that he believes the tough economic situation put more pressure than ever on managers to meet cost targets: “Over the last decade gross [profit] was there and that erases a lot of mistakes.  So the expectations or the pressure put on managers were not as strong as they are now. Now you have to be much more professional because if you make a mistake gross [profit]will not erase it. It will come back in your face.”

He claims moreover that the company did its utmost to retrain staff so their skill sets could meet new requirements and that managers worked to ensure staff were placed in roles that met their existing expectations. “We had to do things for these people so we massively increased staff training. I think the training budgets were up 25 percent during that period. I always say as a manager you have to make sure that you put people in the right position. If you put them too low they will be frustrated and they will want to do more. If you put them too high they will be stressed and not able to progress.”

While quick to deny allegations of bullying within the firm, Wenes admits he can appear abrasive and says working on the way his behaviour is perceived by others is a key goal of his: “One of my weaknesses is the fact that I’m a very demanding person. If you don’t know me you will think ‘If I tell him something wrong, he will kill me’.  A lot of people have that impression. But if you talk to the people I work with they know that’s the way I work. My weakness  is how I can overcome that image so that people feel more comfortable with me.”

The next chapter

After resigning as Deputy CEO, shortly after a 51-year-old father-of-two became the 24th member of staff to commit suicide, Wenes was moved to another department within France Telecom, which is involved in the company’s business outside France. This, he says, was partly because, given the negative publicity surrounding his role in the company’s restructuring, he could no longer work in France. Denying that he resigned from the company, he says: “I said to my boss ‘Under these conditions I’m not able to do my job anymore – therefore I want you to give me another assignment other than this one’.” He continues: “The mood was such in France that whatever I would have said wouldn’t have been listened to because of all these rumours that we didn’t kill upfront. So it doesn’t make sense that I continue to work in France, so I’m doing special business outside France.” Despite the tragic chain of events leading to Wenes’ departure from France Telecom, he claims to be proud of what he achieved within the company and looks back on his experiences within the company as positive ones: “I love what I’ve been doing. I love these teams and what we’ve done together. I love what we’ve built together and all the battles and victories we’ve been through. We made it, we brought together France Telecom from a situation where it was almost bankrupt.”

But at what cost, this business success? As France continues to reel from the shock of the 25 suicides, questions must be asked as to how far businesses will and should go to survive against the economic odds, even at the cost of human lives.  Questions also remain over the French government’s relatively late intervention into the management practices of this private sector company. It was not until September 2009 that the French Labour Minister Zavier Darcos agreed to meet France Telecom’s CEO Didier Lombard to discuss the situation – despite the fact that 23 workers had taken their lives since 2008.  But most importantly, the situation poses a dilemma for all business leaders, over what the balance should be between companies’ responsibility for employees’ welfare, and their own business objectives.

What happens next?

Earlier this year France Telecom commissioned the HR consultancy Technologia to conduct a report into the company’s management practices. It based its report on interviews with 500 staff who were asked to air their grievances in detail. The report was published in March and urged the organisation to introduce new personnel practices and move as quickly as possible to “take charge and encourage radical change to recover its former status in the eyes of the public, shareholders, and workers”. It claimed that without quick action, the situation at the company could worsen. The report makes 107 recommendations, including a move away from the company’s aggressive management style, a more transparent HR department and a moratorium on any further reorganisation exercises. The report also advocates the introduction of a system to monitor “psychological risk factors” and to deploy a team of mediators to work with disgruntled workers.
After the French government stepped in to talks with France Telecom’s management, the company agreed to discontinue the programmes and initiatives that had been identified as being particularly disruptive by staff. It has also agreed with unions to address key issues such as mobility, work-life balance and stress.