PARIS--Vivendi SA (VIV.FR) is pushing ahead with roughly EUR1
billion in cost cuts at its French telecoms unit, just days after
Vivendi's chief executive walked away amid disagreement over
whether the entertainment and media conglomerate should split
itself apart.
The French telecom unit, dubbed SFR, said in a meeting with
union officials on Tuesday morning that it plans to cut roughly
EUR450 million in costs in 2012, and roughly an additional EUR500
million in 2013, according to people familiar with the matter. The
cost-cutting figures came as part of a broader strategic plan to
counter a price war in the French phone market.
SFR also told unions it will announce in November a round of job
cuts through voluntary departures, a spokesman said. The spokesman
declined to specify the number of cuts, saying details of SFR's
broader reorganization were not yet decided. SFR has about 10,000
employees.
The cost-cutting comes just days after Vivendi chief executive
Jean-Bernard Levy -- who was also temporarily running SFR -- was
squeezed out in a strategy disagreement with the Vivendi's board.
The board is seriously considering breaking apart Vivendi's assets,
according to people familiar with the matter. Mr. Levy had long
been a advocate of keeping Vivendi's diverse set of assets.
SFR, France's second-largest mobile phone provider after France
Telecom SA, is reeling from a price war following the entry in
January of a fourth mobile-phone operator, Iliad SA's Free Mobile.
Vivendi said earlier that it expects SFR's earnings before
interest, tax, depreciation and amortization set to tumble 12% to
15% in 2012.
Write to Sam Schechner at Sam.Schechner@wsj.com