Alcatel-Lucent plans to cut 10,000 jobs globally
Print Edition
Telecom equipment maker Alcatel-Lucent announced plans yesterday to cut an overall 10,000 jobs worldwide in what its chief executive called a last chance to turn the company around from heavy losses.
The product of a 2006 Franco-US merger aimed at creating a global giant, Alcatel-Lucent told a European works council meeting it intends to axe nearly one in seven of its employees. Altogether, 4,100 posts will go in Europe, the Middle East and Africa, 3,800 in the Asia Pacific region, and 2,100 in the Americas.
This is the latest step in a “Shift Plan” announced in June to focus on high-growth areas ranging from 4G mobile to high-speed broadband, and to lower fixed costs by more than 15 percent, saving a total of 1 billion euros (US$1.36 billion).
“The Shift Plan is about the company regaining control of its destiny,” Chief Executive Michel Combes said in a statement.
“Everyone knows this plan is the last chance. The company is in a very serious situation,” Combes, the latest of three CEOs since the merger to try to stabilize the group, told Le Monde newspaper.
Including past measures, the total cost of the plan is 1.2 billion euros, an amount the company expects to fund through asset sales.
“The group is eating up a lot of cash and is unable to enhance its profitability, so some kind of change was needed to make sure it has a long-term future,” said one Paris-based financial analyst who declined to be named.
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.”
The union said Alcatel was planning to close its sites in the French cities of Rennes and Toulouse quickly, and sell its Eu, Ormes and Orvault sites by the end of 2015.
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