BCE cuts 2,500 manager jobs as buyout nears
By Wojtek Dabrowski
TORONTO (Reuters) - BCE Inc (BCE.TO: Quote)(BCE.N: Quote) said on Monday it will slash 2,500 management jobs at its main Bell Canada phone company unit to clamp down on costs as it gets ready to go private in the world's biggest leveraged buyout later this year.
Canada's biggest telecom company said the cuts amount to about 6 percent of the total Bell Canada work force, or about 15 percent of management. They include a 30 percent reduction in executive jobs that the company announced earlier this month.
The cuts, combined with other reductions the company made earlier this year, are expected to generate annualized savings of about C$300 million ($294.1 million).
"It was just a top-heavy structure and I think this kind of puts it more in line with what it should be in order to work more efficiently," said Troy Crandall, an analyst at MacDougall, MacDougall & MacTier.
Montreal-based BCE is being taken private in a C$34.8 billion buyout led by the Ontario Teachers Pension Plan and a group of U.S. private-equity firms. The deal is due to close later this year and will saddle the company with billions of dollars of debt.
That, in turn, has put pressure on management to cut costs and generate as much cash as possible to repay that debt.
Crandall said BCE could limit pay increases and crimp employee savings plans in order to further tighten its cost structure.
George Cope, the new CEO of Bell Canada and BCE, had been widely expected by analysts to make sweeping cost cuts and other internal changes during his first months on the job. Continued...