Reports: Alcatel-Lucent Plans To Cut 10,000 Jobs

(RTTNews) - Beleaguered telecommunications equipment maker Alcatel-Lucent SA is planing to slash a net of 10,000 jobs as part of its larger strategy to cut costs over the next three years, according to media reports on Monday. The company is expected to formally announce the job cuts as early as Tuesday at a union meeting.

The company is looking to cut a total of 15,000 jobs primarily at its older technology businesses such as 2G and 3G wireless equipment. Meanwhile, it will also create additional 5,000 jobs at its growth areas that focus on its Internet routing protocol business, cloud technologies, as well as wireless and broadband equipment.

The job cuts will impact about 15 percent of the company's global workforce, with most of the jobs being lost in Germany and quite a few in France also. At the end of 2012, the company's worldwide employee count stood at 72,344, including 9,483 in France.

The move is part of the French telecom-equipment giant's larger three-year plan called 'The Shift Plan', aimed at repositioning the company as a specialist provider of IP Networking and Ultra-Broadband Access.

The plan, announced in mid-June, targets 1 billion euros in fixed cost savings and asset sales of more than 1 billion euros over the next three years through 2015. The primary goal is to become cash-flow positive by 2015.

The plan will see the company reshape itself as a smaller company that is focused on very few core businesses.

The strategy to save costs was announced by the new CEO Michel Combes withing three months of his taking over the new position on April 1. While reporting the company's first-quarter results in April, Combes had said that the company's businesses and operating model were being reviewed.

Combes is a former executive of British telecom giant Vodafone Group plc. (VOD, VOD.L). 51-year-old Combes has more than 20 years of experience in the telecommunications industry on a worldwide basis, including tenures at Bell Canada and Nortel Networks.

Alcatel-Lucent was created in 2006 by the merger of France's Alcatel and Lucent Technologies of the U.S.

Alcatel-Lucent has been reporting weak earnings results for the recent quarters due to weak wireless segment revenues. The company is trying to cope up with rapid customer migration from CDMA to 4G LTE services, particularly in North America, and also grappling with continued market uncertainties in Europe.

In late July, Alcatel-Lucent reported a wider loss for the second quarter, hurt by hefty restructuring and asset impairment charges, consistent with its previously announced "The Shift Plan". Revenues edged up with improved performance in IP division and North America, despite poor performance in all other regions.

ALU closed Monday's regular trading session at $3.85, up $0.01 or 0.26% on a volume of 15.60 million shares. The stock gained a further $0.04 or 1.04% in after-hours trading.