Alcatel-Lucent hit by further losses

Thousands of jobs are to go after the French-American telecommunications company posted its second serious quarterly loss in a row

Alcatel-Lucent is to cut 4,000 jobs and undergo major restructuring after it posted a third-quarter loss of €258m (£180m).

The telecommunications company's chief financial officer, Jean-Pascal Beaufret, will step down from his position in the wake of Wednesday's financial statement, which covers the three months to the end of September. He will be replaced by Hubert de Pesquidoux, currently head of the company's enterprise group.

A seven-person management committee is to be set up to lead the overall operation of the company, which also suffered a serious loss in the previous quarter. Also departing Alcatel-Lucent in the restructuring is Christian Reinaudo, head of the Europe and North region.

According to the financial statement, Alcatel-Lucent's latest loss represents a 7.8 percent drop year-on-year. The company was formed only last year following a merger between the French firm Alcatel and the US equipment manufacturer Lucent.

"As you can see our results this quarter were essentially in line with the update we provided on 13 September, and in a few areas a bit better; however they are still not at a level that we are satisfied with," said the company's chief executive, Pat Russo, on Wednesday.

Although Russo praised the work done by the company in the first nine months of its existence, she added that: "In spite of the promise of this industry and the long-term benefits of the merger, we recognise that market conditions remain difficult, with continued pressure on revenues and margins due to intensified competition and some slowdown of spending in North America".

Alcatel-Lucent will now be increasing its focus on the growth of wired and wireless IP-based networking, particularly for the enterprise, industry, public sector and carrier markets.

Wednesday's statement appeared to suggest that the 4,000 job cuts are likely to happen in the company's support and carrier business divisions, although a spokesperson for the company refused to provide any breakdown of the cuts according to geographical region or business unit. These cuts are in addition to the 12,500 job losses announced in February of this year.

The company expects that the cuts and restructuring will save it €400m (£280m) in gross margin and comparable operating expenses by the end of 2009.

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