Alcatel-Lucent SA will slash 10,000 jobs in a bid to steer the company towards becoming a smaller entity focused on next-generation technologies.
The telecommunications equipment announced on Tuesday that while cutting away roughly 15 percent of Alcatel-Lucent's overall workforce, a number of new jobs will be added in specialized sectors -- IP networking, cloud and ultra-broadband access.
The layoffs were announced at a meeting between Alcatel-Lucent and European works council (ECID) union representatives. Alcatel-Lucent will cut roles in older technology sectors, including 2G and 3G wireless networking equipment -- hitting those in Germany and France the hardest.
By the end of 2015, Alcatel-Lucent will cut away 10,000 job roles: 4,100 positions in Europe, Middle East and Africa, 3,800 in Asia Pacific and 2,100 in the United States. 5,000 new roles will be created in areas that offer growth potential for the firm, including Internet-routing.
In addition, the firm will halve the number of its business hubs worldwide.
Chief Executive Officer Michel Combes has been seeking ways to cut costs, improve efficiency and turn the telecommunications equipment maker into a more profitable business. The next wave of job cuts is part of The Shift Plan, the CEO's brainwave to cut $1.36 billion in costs, sell €1 billion in assets and move the firm towards more profitable arenas. As part of the refocusing plan, Alcatel-Lucent hopes to reduce costs by 15 percent by the end of 2015.
Competition outside of Europe, from sources including Huawei and ZTE, alongside falling consumer demand and the rapid development of next-generation technology, has contributed to a rocky balance sheet for the firm. The cuts may also be a way to make Alcatel-Lucent more attractive to prospective buyers before the sale of assets.
"We launched The Shift Plan in June to give Alcatel-Lucent an industrially sustainable future. The strategic choices we made have been validated by our customers. To carry out this plan we must make difficult decisions and we will make them with open and transparent dialogue with our employees and their representatives. The Shift Plan is about the company regaining control of its destiny."
This post originally appeared on ZDNet.
This post was originally published on Smartplanet.com