Alcatel-Lucent will cut an additional 1,000 jobs in its home country of France over the coming year, according to a report by Reuters citing French union representatives.
The telecommunications equipment provider refused to comment on the cuts but said it had spent the past six months engaged in a transformational program to improve its financial performance.
Like many network equipment providers Alcatel-Lucent has been hard-hit by the recession and the difficult job of selling high-margin, capital-intensive unified communications (UC) products in a time of shrinking IT spending.
The company is no stranger to rough patches. In July last year revealed the resignation of both its CEO Pat Russo and chairman Serge Tchuruk, the architects of the company’s disastrous 2006 merger, after six consecutive quarterly losses.
But today Alcate-Lucent is also well-placed to benefit from the financial misfortune of rival Nortel. For example Verizon, historically one of Nortel’s biggest customers, has signed up with Alcatel-Lucent to develop a multi-billion dollar LTE (Long term evolution) network.
At Alcatel-Lucent’s user conference in Paris earlier this year, new CEO Ben Verwaayen, the former BT supremo, outlined his plan for a fresh agenda: ramping up UC and the associated service wrap, tieing product development more tightly to market demand, and taking advantage of the huge potential in public sector communications infrastructure projects. Governments across the world bankroll are upgrading networks for local government, transport, healthcare, energy and education – in many cases as part of efforts to support flagging economies – and Alcatel-Lucent hopes to capitalise.
World governments, he explains, were focusing on projects that were “shovel-ready”, that would provide “good societal benefit, and put labour back to work very quickly.” China alone, he said, plans to spend 45% of its total $586 billion stimulus plan on public infrastructure and rail projects.
French trade unions have, of late, been a thorn in the side of multinational IT corporations seeking to cut HR overheads. Eariler this month, the Confédération Française Démocratique du Travail called on software giant Oracle to explain why it plans to cut 1,000 jobs in Europe despite reporting a record operating margin of 48%.