Alcatel scales back its portfolio to a mere dozen

Cost-savings are taken to new extremes as Alcatel hacks its manufacturing facilities...

Alcatel is to sell 108 of its manufacturing facilities by the end of the year as part of a cost-savings strategy.

Serge Tchuruk, chief executive and chairman of Alcatel, told the Wall Street Journal that the company's 120-strong portfolio will be drastically cut to 12 or fewer.

Two years ago, the telecoms equipment manufacturer launched a 12,000 job cull in a bid to regain profitability. It recently announced a further 900 job losses.

Tchuruk told the Wall Street Journal he expects Alcatel to become a fab-less company pretty soon. The plants will be sold to contract manufacturers, some of which will make Alcatel products.

Other plants may be sold off with parts of the business that Alcatel wants to dispose of so it can focus on its core areas - broadband access equipment and services.

The news comes hours after Tchuruk told the Wall Street Journal CEO summit that outsourcing was an efficient way to cut costs. "The goal is to divest in areas where you are sure you'll never reach a competent cost base. In a relatively unpredictable business for the short term, the name of the game is flexibility and a big cost-saving associated with that is outsourcing."