Alcatel-Lucent To Cut 15,000 Jobs Worldwide

on October 08 2013 3:04 AM
Michel Combes_Alcatel-Lucent
Michel Combes, Alcatel-Lucent's new CEO, poses for the media before a news conference in Paris on June 19, 2013. Reuters/Charles Platiau

Telecom equipment maker Alcatel-Lucent (NYSE:ALU) plans to cut about 15,000 jobs over the next two years as part of its restructuring plan to focus on its core businesses, according to media reports, which cited people familiar with the matter.

The Paris-based company, which employs 72,000 people worldwide, is expected to announce the downsizing of its workforce by about 15 percent on Tuesday, and hopes to save up to 1 billion euros ($1.4 billion) from the decision, according to reports from French newspapers Les Echos and Le Figaro.

According to the Les Echos report, the company intends to cut about 10 percent of its domestic staff, or about 900 jobs, in France, and close its operations at Rennes and Toulouse.

The company plans to trim about 2,100 jobs in the Americas and 3,800 in Asia, while Europe, the Middle East and Africa will lose about 4,100 jobs, Le Figaro reported. According to a Wall Street Journal report, Germany will be the hardest hit in Europe, and most of the job cuts will be in second- and third-generation wireless equipments businesses, and other older technology segments, the Journal said.

However, the company will create 5,000 new jobs in growth areas such as Internet-routing, which has been identified as part of its restructuring plan. In July, the loss-making company’s new CEO, Michel Combes, who took charge of Alcatel in April had announced a new strategy to turn the company around by focusing on developing its core areas.

According to the new strategy, called “The Shift Plan,” Alcatel would rebrand itself as an IP-networking and ultra-broadband specialist, and will have a profitable business and sound balance sheet by 2015, PC World reported.

The company said it will also sell some of its unspecified assets, and divest its stakes in some of its businesses to generate up to 1 billion euros. 

The company had reported net losses for the past five consecutive quarters and its net loss for fiscal year 2012 stood at 1.2 billion euros, which included one-time expenses related to earlier layoffs and a write-down on its mobile unit, Reuters reported.

In 2012, the company had announced its decision to reduce its workforce by 5,000. Last month, the company was reportedly in talks with Nokia Corporation (NYSE:NOK) for a possible tie-up or a stake sale.  

Alcatel's shares rose more than 1 percent to end at $3.85 in regular trading on Monday.

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