France Telecom ex-CEO Lombard charged with harassment in employee suicides
As government officials continue to look into the suicides of 32 France Telecom (NYSE: FTE) employees that occurred in 2008 and 2009, the spotlight has landed squarely on former CEO Didier Lombard, who was charged Wednesday with harassment by government investigators, Bloomberg reported.
Lombard held the CEO position during a highly controversial period in the telco's history, as the once state-run France Telecom cut tens of thousands of employees and reassigned thousands more in an attempt to bring the carrier into a better financial position.
The government began its investigation in 2009 following a complaint by labor unions that the reorganization of France Telecom was contributing to psychological issues among employees. According to the unions, protected employees who couldn't be fired due to their union status were instead put into "meaningless" jobs, or given impossible performance objectives, in a ploy to force them out. Some of these employees took their own lives, the union said.
Government investigators in February 2010 found that doctors' warnings about the mental health of certain employees were ignored by France Telecom, according to Reuters. The Paris prosecutors' office began its own investigation into possible "morale harassment" in April 2010.
Reuters reported on Wednesday that Lombard had been placed under investigation. The executive, who resigned as CEO of the incumbent carrier in early 2010 and left the company in February 2011, could face up to a year in prison and a fine of €15,000 ($18,589) if found guilty of harassment.
In a survey conducted in late 2009, all of France Telecom's 80,000 employees said that the carrier's management had created a "tense working environment." Many complained that a lack of a transition strategy, as the carrier went private, along with management shortcomings were key factors in the problems at the company.
Lombard led the incumbent telco as it transitioned from its original nationalized roots, with the government holding a majority share, to a privately held company, launching a series of initiatives to cut expenses and bring France Telecom out of a deep slide caused by heavy debt liabilities and losses incurred in acquisitions including Orange. Between 2006 and 2008 more than 22,000 positions were cut and several management changes implemented. These had little effect on the carrier's profitability, however, while deeply impacting employee morale—to the point that not just unions but government representatives began calling for Lombard to step down.
Lombard was questioned by government magistrates for about four hours on Wednesday, Reuters reported, and was released on bail for €100,000 ($123,902).
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