Alcatel-Lucent cuts 10,000 jobs worldwide in turnaround plan

Oct 08 2013, 15:29 IST
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Alcatel-Lucent, which employs 72,000 staff worldwide and competes with Ericsson Huawei and Nokia, has posted five straight quarters of net losses. Alcatel-Lucent, which employs 72,000 staff worldwide and competes with Ericsson Huawei and Nokia, has posted five straight quarters of net losses.
SummaryTelecom equipment maker hopes to save $1.36 bn and turn the company around after years of losses.

Telecom equipment maker Alcatel-Lucent unveiled plans on Tuesday to cut an overall 10,000 jobs worldwide by the end of 2015, hoping to save 1 billion euros ($1.36 billion) and turn the company around after years of losses.

The product of a 2006 Franco-U.S. merger aimed at creating a global giant, Alcatel-Lucent told a European works council meeting it intends to axe 4,100 posts in Europe, the Middle East and Africa, 3,800 in Asia Pacific, and 2,100 in the Americas.

This is the latest step in its "Shift Plan" announced in June to focus on networking products and high-speed broadband, and to lower fixed costs by more than 15 per cent.

"The Shift Plan is about the company regaining control of its destiny," Chief Executive Michel Combes said in a statement.

Shares in Alcatel rose 2 per cent in early trading and were up 1.7 per cent at 2.937 euros by 0921 GMT. The stock has almost tripled in value this year on buyers' hopes that Combes, a former CEO of Vodafone Europe, can shore up the business.

The group, which employs 72,000 staff worldwide and competes with larger rivals Ericsson of Sweden, China's Huawei and Finland's Nokia, has posted five straight quarters of net losses.

France's CFDT union said it would fight a plan that entailed cuts to about 15,000 posts, although 5,000 new jobs will be created, giving the overall loss of 10,000. Nine hundred jobs would go in France, with the closure or disposal of five sites.

"The CFDT is aware of the seriousness of the situation and deplores this," it said in a statement. "But once again it is the staff that are paying the price ... We will fight this plan and make proposals to change it."

A source in the Socialist government, which has watched Alcatel-Lucent's problems closely as it battles rising unemployment in France, emphasised that the plan was an attempt to push the group on to a growth track.

"They are investing to get the machine going again," said the source, who declined to be identified. "The situation is serious, but it is understandable the unions are very upset."

PRICE PRESSURE

The Alcatel-Lucent merger was an attempt to pool resources but any savings were lost due to fierce price competition in the sector and as slow economies, particularly in Europe, dented demand for telecom equipment.

Last year it swung to a net loss of 1.2 billion euros - the biggest since 2008 - largely

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