French network giant to cut 10,000 jobs

Alcatel-Lucent plans to reduce 14 per cent of its global workforce

Pressure on equipment prices and slower investment from European carriers, along with competition from China’s Huawei Technologies, is forcing Paris-based network giant Alcatel-Lucent to restructure.

Pressure on equipment prices and slower investment from European carriers, along with competition from China’s Huawei Technologies, is forcing Paris-based network giant Alcatel-Lucent to restructure.

Tue, Oct 8, 2013, 08:29

Alcatel-Lucent plans to reduce staff by 10,000 as chief executive officer Michel Combes moves forward with cost cuts to turn around the unprofitable French network-equipment maker.

The cuts represent about 14 per cent of Alcatel-Lucent’s workforce worldwide, based on the 72,000 employees the Paris- based company has. About 4,100 jobs will be cut in Europe, Middle East and Africa, 3,800 in Asia and 2,100 in the Americas, the company said today in a statement.

Alcatel-Lucent employs about 130 people at its Irish operation in Blanchardstown, Dublin, according to www.top1000.ie.

Alcatel-Lucent is accelerating a turnaround bid after thousands of earlier job cuts, restructuring and asset sales failed to stem losses. Pressure on equipment prices and slower investment from European carriers, along with competition from China’s Huawei Technologies, are forcing Alcatel-Lucent and rivals such as Nokia Oyj’s network-gear unit to reduce staff.

“This is something Alcatel needed to do,” said Eric Beaudet, an analyst at Natixis Securities in Paris, who recommends buying Alcatel-Lucent shares. “The magnitude of the plan is big and shows the management’s resolve in rapidly executing its turnaround.”

A slimmer organisation could make Alcatel-Lucent more attractive target for an acquirer. Nokia, set to become a manufacturer focusing on wireless networks after the sale of its handset business, is understood to be evaluating a linkup with Alcatel-Lucent.

Alcatel-Lucent rose 0.4 per cent to €2.89 yesterday in Paris. The stock has almost tripled this year, though it is still down more than 90 per cent since its peak.

lcatel-Lucent is following in the footsteps of competitor Nokia’s network unit, NSN, which in late 2011 started a savings program to cut 17,000 positions, or about 23 percent of its total. The Finnish company has since cut more positions, in excess of 20,000 during the past two years. Cisco Systems, the world’s biggest maker of networking equipment, said in August it’s cutting about 5 per cent of its workforce.

Bloomberg