Alcatel-Lucent to cut 5,490 jobs globally

Telecoms equipment maker outlines details of its cost-saving program first announced in July, which had only estimated about 5,000 job cuts; more than half will be in Europe, and around 1,000 in Asia.
Written by Ellyne Phneah, Contributor

Alcatel-Lucent plans to axe 5,490 jobs globally as part of a cost-saving program in July to help it return to profitability.

Executives from the French telecoms equipment maker had outlined new details of a broader restructuring plan it first announced in July which aims to cut 1.25 billion euros (US$1.64 million) in costs by the end of 2013, at a Europe-wide union representatives meeting on Thursday, the Wall Street Journal (WSJ) reported.

Overall, the company plans to slash 7.2 percent of Alcatel-Lucent's global workforce of 76,002. The job cuts will hit France the hardest where the company plans to eliminate 1,430 jobs, officials noted.

The cuts "reflect the focusing of the company's presence in some geographies, as well as the need to align our cost structure in all geographic and functional areas, with the exception of research and development," the Alcatel-Lucent spokesman said in the article.

The axe will mainly fall on support functions such as sales, marketing, finance and human resources, but not affect the 26,000 staff working on research and development, a separate report by Reuters noted. Overall, 990 job cuts are planned in the Asia-Pacific, 1,200 in America and 3,300 in Europe, Middle East and Africa.

"These are difficult decisions, but are necessary for the long-term health and sustainable profitability of the company," an Alcatel-Lucent spokesperson noted during the meeting.

The job cuts are the latest in the company's efforts to lower its cash-flow losses and return to profitability, in light of a slowdown in spending by telecommunications companies in Europe, and steep competition on costs which cut margins. 

Earlier this week, unnamed executives said Alcatel-Lucent will cut 1,000 jobs, or 9 percent, in India, with slowing business in the country, but the company refuted the claim, stating it had not made further announcements regarding the restructuring exercise, and does not have other job cuts planned beyond the 5,000 it revealed in July.

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