French network equipment manufacturer Alcatel-Lucent has announced it is to cut its work-force by 10,000 – around 15 per cent of the total – in an effort to cut costs.
All geographic areas where Alcatel-Lucent operates will be affected, with the reduction of 4,100 positions in Europe, Middle East and Africa, 3,800 in the Asia-Pacific region, and 2,100 in the Americas. By the end of 2015, Alcatel-Lucent aims to halve the number of its business hubs globally.
The job cuts, which come after the company laid off 5,000 people earlier this year, are being touted as necessary if Alcatel is to have a sustainable future and are being presented as part of a 'Shift Plan' to streamline the organisation.
Michel Combes, CEO, said: 'We launched the Shift Plan in June to give Alcatel-Lucent an industrially sustainable future. The strategic choices we made have been validated by our customers. To carry out this plan we must make difficult decisions and we will make them with open and transparent dialogue with our employees and their representatives. The Shift Plan is about the company regaining control of its destiny.'
The company says it is committed to achieve fixed cost savings of a billion euros, or more than 15 per cent of its fixed costs, by the end of 2015. As well as the job cuts, it says this will be achieved by:
- Reallocating R&D investment to next-generation technologies which should represent 85 per cent of R&D spend in 2015, as opposed to 65 per cent today.
- Reducing R&D spend in legacy technologies by 60 per cent; and
- Reducing administrative, sales and support functions to bring SG&A costs in line with industry standards.
Shares in the company rose two per cent when the news was released.