Alcatel-Lucent plans to reduce staff by 10,000 as chief executive Michel Combes moves forward with cost cuts to turn around the unprofitable French network-equipment maker.
The cuts represent about 14% of Alcatel-Lucent’s workforce worldwide, based on the 72,000 employees the Paris- based company had as of December.
About 4,100 jobs will be cut in Europe, Middle East and Africa, 3,800 in Asia and 2,100 in the Americas, the company said today in a statement.
Alcatel-Lucent is accelerating a turnaround bid after thousands of earlier job cuts, restructuring and asset sales failed to stem losses.
Pressure on equipment prices and slower investment from European carriers, along with competition from China’s Huawei Technologies are forcing the company and rivals such as Nokia Oyj’s network-gear unit to reduce staff.
A slimmer organisation could make Alcatel-Lucent more attractive target for an acquirer.
Nokia, set to become a manufacturer focusing on wireless networks after the sale of its handset business, is evaluating a linkup with Alcatel-Lucent, people with knowledge of the matter said last month.
Alcatel-Lucent is following in the footsteps of competitor Nokia’s network unit, NSN, which in late 2011 started a savings programme to cut 17,000 positions, or about 23% of its total. The Finnish company has since cut more positions, in excess of 20,000 during the past two years.
Cisco Systems, the world’s biggest maker of networking equipment, said in August it is cutting about 5% of its workforce.
CEO Combes has pledged to sell assets to raise €1 billion and reduce expenses by another €1 billion.
The company, which has lost more than $10 billion since it was created, is also in talks with more potential research partners which could become Alcatel shareholders.