* Could slow plan to cut costs by 1.7 billion by 2011
* Suicides put CEO Didier Lombard's position at risk
* Share price down about 2 percent
By Leila Abboud
PARIS, Sept 30 (Reuters) - A spate of suicides among employees at France Telecom could dent the investor appeal of the former state-owned monopoly if they lead to management upheaval or slow the pace of cost cuts, analysts believe.
As a media and political storm intensified around France Telecom, some analysts have started to question whether the firm will be able to deliver on its promise to cut costs by 1.7 billion euros through the end of 2011.
The cost cuts, 32 percent of which are supposed to come in France, are a crucial tool for France Telecom's plan to generate 8 billion euros in free cash flow in 2009, 2010, and 2011.
"It is possible that the planned restructuring might be delayed," wrote one London-based analyst in a research note.
"The situation is weighing on the share price," said a Paris-based analyst, referring to the increasing tensions between the company, its workers and the government.
There have been 24 suicides at France Telecom since the beginning of 2008 and 13 attempts, according to labour unions who blame restructuring and poor working conditions for creating a climate of stress and unhappiness.
A spokeswoman for France Telecom declined to comment on how the suicides could affect the business.
But in an interview with Reuters in New York last Thursday, Chief Financial Officer Gervais Pellissier acknowledged that the situation posed a risk to the group.
"If we are not able to deal with the issue in the next weeks, it's going to hurt our bottom line," said Pellissier. "It's a serious issue. We have to deal with it."
After a 51-year old France Telecom worker jumped off a highway overpass in Annecy on Monday, left-wing politicians, including the opposition Socialist party, have called for Chief Executive Didier Lombard to quit.
Unions also called for Louis-Pierre Wenes, who heads France operations, to stand down.
"I don't think the situation will affect the company's financial objectives, but it is a catastrophe in terms of its brand image," said another Paris-based analyst.
GOVERNMENT SUPPORT
The government, which is France Telecom's biggest shareholder with a 27 percent stake, has voiced support for Lombard via spokespeople who said ousting the CEO was not the right answer.
"We shouldn't have this reflex of thinking that cutting off the head of the boss will solve all the problems in a company," said Jean-Francois Cope, the head of President Nicolas Sarkozy's UMP group in the National Assembly.
Under pressure from unions, Lombard has promised to freeze all transfers of workers until the end of the month.
Unions are also calling for a new early retirement scheme like one in 1996 when France Telecom was transforming itself from a government agency to a for-profit company.
That program led 40,000 workers to leave the firm at a cost of about 200,000 euros each and analysts fear a new scheme could add another layer of costs.
France Telecom's shares were down 2.02 percent to 18.15 euros per share at 1655 GMT, compared with a 1.15 percent decline for the CAC 40 index.
(Reporting by Leila Abboud)