France Telecom-Orange has followed Deutsche Telekom and Telefonica in announcing a multi-year cost reduction plan, which it has called Chrysalid, the pupa stage in the insect world, to represent a transition. DeTe's 'Save for Service' project aims to save EUR 4.2 billion between 2010-2012 and Telefonica announced in April that it would cut 20 percent of jobs in its efforts to save money. For its part, France Telecom-Orange plans no new layoffs, choosing instead to make savings in operating costs, mainly at its French operations. Group senior executive vice president Pierre Louette, told Les Echos that Chrysalid fits into the Conquest 2015 five-year plan, for which all subsidiaries were questioned about how their operating costs were likely to change in the next few years. Louette said that if nothing is done, operating costs, at over EUR 30 billion in 2010, would grow faster than revenue by 2015. Costs and taxes are continually rising with French telecoms operators taxed 25 percent more than any other industry, according to Louette. The group wants to limit its expenditure to EUR 33.5 billion, to slow its rise by EUR 2.5 billion over four years. Around 60 percent of the savings must be made by the end of 2013. After 2015, the company wants to save EUR 900 million a year. Orange subsidiaries in different countries will share good practice to limit the spend on networks, general costs, marketing, customer relations management, property and distribution. The best of these practices could be generalised group-wide. Major cost savings will come from France Telecom-Orange's Buyin purchasing joint venture with DeTe. The French group spends EUR 19 billion a year on IT services, network equipment, mobile phones, etc.
