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France Ian Sparks reports from Paris on jobs going and jobs to come (perhaps).
T
he spectre of thousands of job cuts is looming over France’s banking industry in the wake of the election of new socialist president Francois Hollande – the selfdeclared ‘enemy of finance’. Cuts are threatened in both the retail and investment sectors as banks brace themselves for a regulatory clampdown and rocketing corporation taxes, and grapple with a slowing economy and weak capital markets. The predicted wave of lay-offs also comes as the new French employment minister Michel Sapin warned that the left-wing government would do ‘everything in its power’ to prevent banks from streamlining their operations and boosting their share prices with mass firings. In line with Mr Hollande’s belief that governments and large companies should give up austerity and ‘spend their way out of debt’, Mr Sapin said: “We want to make it extremely expensive for firms to make staff redundant. Instead, they should be investing in their workforce, hiring more staff, growing and feeding their wealth into the economy.” But the minister’s words are expected to go unheeded by any wealthy bank bosses that actually remain in France after the introduction of Mr Hollande’s promised top rate income tax hike to 75 per cent for millionaires. Stephane Rambosson, managing partner at executive search firm Veni Partners, said banks had held off from large scale sackings during the election for fear of harming the campaign of finance-friendly Nicolas Sarkozy. But now that he had been ejected from office, the gloves were off and cull was set to begin, Mr Rambosson said. He added: “They’ve been waiting until after the election because they didn’t want to alienate their friends in Mr Sarkozy’s UMP party. Most of these guys are pretty close to Sarkozy and they didn’t want to have any negative effect on his election campaign.” France’s biggest bank BNP Paribas has already announced plans to lay off 1400
employees, while its rival Societe Generale is cutting roughly 1600 jobs. Up to 4000 more redundancies are expected at the French branches of foreign banks, particularly at UniCredit and ING. Christophe Nijdam, an analyst with Paris-based research firm Alphavalue, said: “Smaller lay-offs that began last year are now being viewed as insufficient and they look set to go a lot further in 2012. It will probably then take a full year for the French banks to get their act together again regarding their new business model.” While most French banks’ attention has been on their corporate and investment banking arms, a downturn in the French housing market and the ensuing mortgage slowdown could also mean cuts in retail banking staff, he added. More sackings also look certain in other industrial sectors in the coming months, with Air France-KLM saying it needs to make deep labour cuts and retailer Carrefour threatening to fire 3000 to 5000 French staff, unions have said. A car industry plagued by overcapacity and a telecoms sector stung by competition from low-cost operator Free Mobile may also make cutbacks.
Tax and spend In contrast, Mr Hollande has vowed to boost already huge government spending by hiring 60,000 extra teachers, 5000 extra police and subsidising 150,000 ‘jobs for the future’ for young people. He is also committed to lowering the right to retire to the age of 60 for people who started work at 18. A special surtax on banks, hiking corporation tax from 30 to 35 per cent, repealing a range of tax breaks for companies and households, increasing wealth taxes, inheritance tax, capital gains tax and income tax are all part of the plan to fund his 100 billion euro spending programme.
Despite his pledge to create an extra 80,000 jobs in the civil service, Mr Hollande has said the overall number of public employees will not rise, but he has not yet said where cuts will come from to offset his job pledges. When he does, he may find like many recent presidents before him, that the French ‘fonctionnaires’ unions, fresh from their two-month long summer holidays, decide that – socialist president or not – the autumn is the perfect time to dust off their banners and take to the boulevards of Paris. In fact, Mr Hollande already had the first little noticed public protest of his presidency just a week after winning the election on May 6. Eighteen erotic dancers from Paris’s famous Crazy Horse cabaret got dressed and staged a three-day demonstration on the Champs-Elysees protesting that their meagre €2000 a month wages were not enough to take account of the fact they had to work in the nude. The striking strippers appointed 24-yearold spokeswoman Suzanne Durand, who told France’s RTL radio: “Our work is exceptional because we get entirely naked on stage, and this alone should be taken into account in our pay. “Being nude every night is not an easy thing from either a moral or physical point of view, and to be paid this salary makes it seem vulgar, as if there’s no difference between a Crazy Horse dancer and some cheap girl working in a peep show.” After forcing the cabaret to cancel shows on three consecutive nights, they are now celebrating being awarded a €300 a month pay rise. French daily France-Soir said: “They have the right to fair pay for hard work like any other French person, and they have every right to go on strike to demand that. “Their protest ended quickly, probably much to President Hollande’s regret, as we are sure this is one strike that he would have n loved to be involved in.” Industry Europe 23
