Tech

Leila Abboud is a Bloomberg Gadfly columnist covering technology. She previously worked for Reuters and the Wall Street Journal.

You have to hand it to Patrick Drahi, he's probably the best cost manager in global telecoms. France's SFR, still his most important asset, has revenue per employee that's miles ahead of rivals, whether in France, Europe or the U.S.

Yet he obviously believes more can be done. Faced with declining sales at SFR, Drahi is doubling down by negotiating a deal with unions to eliminate 5,000 jobs by 2019. As the chart below shows, he's managed to squeeze more from each employee for four years running and doesn't want to let up.

The Drahi Effect
Patrick Drahi has improved the revenue per employee generated by his French telecom company yet wants to go much further by cutting about one-third of the staff by 2019
Source: Bloomberg
*Figures for 2013, 2014 are for Numericable only, and do not factor in November 2014 acquisition of SFR

Looked at on the same basis, French market leader Orange doesn't come close, while even Xavier Niel's lean and mean Iliad trails behind:

Niel Is Nearest
Founded in 1990 as a broadband upstart, Iliad is more efficient than Orange, which is burdened by a large staff from when it was a government-run monopoly. Drahi's SFR beats them both
Source: Bloomberg

This last chart puts SFR in global context and shows why Drahi wants to bring that same tough love to the U.S. after buying Suddenlink and Cablevision.

Top of the Chops
SFR beats international peers on revenue per employee
Source: Bloomberg
Figures have been translated into euros for comparison

Yet all this tells only half the story. As I've explored before, the big question is whether Drahi's just a corporate slasher or can he make a long-term success of running a telecoms and cable company, where customers demand a certain level of service. Such worries help explain the poor share-price performance at SFR and parent Altice. While Drahi promises to reinvest savings, cutting more jobs is a bold way of putting those fears to the test.

This column does not necessarily reflect the opinion of Bloomberg LP and its owners.

To contact the author of this story:
Leila Abboud in Paris at labboud@bloomberg.net

To contact the editor responsible for this story:
James Boxell at jboxell@bloomberg.net