Alcatel-Lucent announces 10,000 jobs cuts globally

The company has lurched from crisis to false dawn to crisis since it was formed of a merger in 2006, and is restructuring and refocusing its activities to reverse losses.

Chief executive officer Michel Combes, who informed the company’s European works council of the ‘Shift’ plan, said it was time for tough measures.

“We launched the Shift Plan in June to give Alcatel-Lucent an industrially sustainable future,” he said.

“To carry out this plan we must make difficult decisions ... The Shift Plan is about the company regaining control of its destiny,” he said in a statement.

The cuts represent about a seventh of the company’s global work force of 72,000.

Alcatel-Lucent said 4,100 jobs would be cut in Europe, the Middle East and Africa by 2015, 3,800 in the Asia Pacific region, and 2,100 in North and South America.

Some 900 jobs will be axed in France and according to French economic newspaper Les Echos, two sites in the cities of Rennes and Toulouse will be closed and plants elsewhere sold.

“By the end of 2015, Alcatel-Lucent will halve the number of its business hubs globally,” the statement said.

Alcatel-Lucent has been facing stiff competition from bigger rivals in Europe and Asia including Ericsson, Nokia and Huawei.

The new plan is aimed at transforming research and development and “reallocating spending to focus on future technologies while making a significant reduction of fixed costs,” a statement said.

It wants to develop digital operations at the expense of some of the more traditional ones. The new technologies include 4G and IP platforms and ultra-fast fixed and wireless Internet.

The company will raise spending on research and development for future technologies to 85 percent of the R&D budget from the current level of 65 percent.

The budget for outmoded or “legacy” technologies will be slashed by 60 percent, the statement said.

Alcatel-Lucent posted a loss of 885 million Euros ($1.2 billion) in the six months to June this year, compared with a loss of 396 million Euros for the same period in 2012.

The Paris-headquartered company had announced earlier this year that it would collaborate with US firm Qualcomm Technologies to develop so-called small-cell base stations to improve the quality of 3G, 4G and wifi network connections.