EDF to shed some 6,000 jobs over next two years

8th December 2005, Comments 0 comments

PARIS, Dec 8 (AFP) - The French electricity giant EDF announced overnight that it would cut about 6,000 jobs, resurrecting controversy over the group's part privatisation three weeks ago.

PARIS, Dec 8 (AFP) - The French electricity giant EDF announced overnight that it would cut about 6,000 jobs, resurrecting controversy over the group's part privatisation three weeks ago.

The company, Electricité de France, said that it would shed 6,000-6,500 jobs by replacing only "one in three or four" of 9,000 employees who would retire in the next two years, stressing that no-one would be dismissed.

EDF, which is the biggest generator of nuclear power in the world, employs about 160,000 people worldwide. The reduction represents about 3.75 percent of its workforce.

The group has a high profile in the hearts of the French people as an example of state-controlled public services and the announcement provoked immediate opposition from trades unions.

The sale three weeks ago of 15 percent of the company to employees and private and institutional investors was strongly opposed by unions and by politicians in opposition to the centre-right government.

The part privatisation flotation is seen by some analysts as somewhat disappointing because the shares are still slightly below the issue price of 32.0 euros.

Trades unions questioned the logic for the job losses.

A spokesman for the CGT trade union, Maurice Marion, asked: "Is it something to boost shares on the stock exchange?" He added: "There is going to have to be a confrontation."

French Prime Minister Dominique de Villepin, underlining political sensitivity in France to job losses and particularly in the public sector, said that the decision to reduce the workforce had been made before the part privatisation.

The French state still owns 85 percent of EDF. The initial public offer last month was the biggest share issue ever seen on the Paris stock market, raising EUR 7 billion for the company and about EUR 1 billion for strained public finances.

"To not replace some people who are retiring, that is among the demands of the world today, to adapt and to organise," Villepin said on the French radio station France Inter.

EDF also unveiled plans to invest EUR 40 billion over the next five years, more than half of which is to be invested in France to "install more than 5,000 megawatts on French territory, the equivalent of five existing nuclear reactors."

It was not known how much, if any, of the investment would be in nuclear energy, though EDF did say that investments would be made in the sectors of energy production, transportation and distribution.

In mid-day trading, the price of EDF shares showed a gain of 0.35 percent to EUR 31.77.

The part privatisation was hailed as a popular success by the French government because five million private investors subscribed.

However, some financial analysts and institutional investors said that the issue price of EUR 32 was too high given that the state retained power over pricing policy, doubts over the cost of decommissioning nuclear power stations and the power of trades unions.

EDF, which produces 74 percent of its electricity from nuclear power stations, generates about a quarter of all Europe's electricity. It is the biggest generator in Europe and the biggest nuclear-power generator in the world.

Copyright AFP

Subject: French news

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