Alcatel-Lucent to lay off 10,000 workers by 2015

Alcatel-Lucent to lay off 10,000 workers by 2015

PARIS - Reuters
Alcatel-Lucent to lay off 10,000 workers by 2015

This file photo shows the plant of French-US telecom-equipment maker Alcatel-Lucent in Rennes. The group is to cut 10,0000 jobs worldwide. AFP photo

Telecom equipment maker Alcatel-Lucent unveiled plans Oct.8 to cut about 10,000 jobs worldwide by end-2015 in a cost-cutting drive to save 1 billion euros ($1.36 billion) and reverse years of losses.

The company intends to axe 4,100 posts in Europe, the Middle East and Africa, 3,800 in Asia Pacific, and 2,100 in the Americas, it said ahead of a meeting with its European works council Oct.8.

Alcatel announced in June the “Shift Plan” to focus on networking products and high-speed broadband and lower fixed costs by more than 15 percent, but it had yet to detail job cuts.

“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 percent in early trading and were up 1.4 percent at 2.927 euros by 0712 GMT. The stock has almost tripled in value this year, with hopes that Combes can turn around the business.

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

Last year it swung to a net loss of 1.2 billion euros - the biggest since 2008 - largely because of a writedown on its mobile unit and restructuring costs from an earlier plan to lay off 5,000 workers.
Alcatel confirmed it would dedicate 85 percent of its research and development budget in 2015 to next-generation technologies, up from 65 percent today. Spending on older technologies would be cut by 60 percent.

By the end of 2015, Alcatel will halve the number of its business hubs globally, it added.

The layoff plan is the latest in a series at Alcatel-Lucent. In autumn 2012, it announced moves to trim 5,000 workers from its base of 76,000 at the time, with the heaviest burden falling in France.