Alcatel-Lucent detailed how it plans to cut its workforce by 5,490 jobs as part of a plan to save €1.25 billion by the end of 2013. French unions have asked for the government to intervene over the 1,400 jobs that will be lost in France as a result.
Alcatel-Lucent the headcount reductions are needed because they "reflect the focusing of the company's presence in some geographies, as well as the need to align our cost structure in all geographic and functional areas, with the exception of R&D."
"These are difficult decisions, but are necessary for the long-term health and sustainable profitability of the company," Alcatel-Lucent spokesman Simon Poulter told Bloomberg.
The Paris-based vendor first revealed plans for the reshuffle in July, when it estimated around 5,000 jobs would be eliminated and targeted cost reductions in supply-chain management.
Despite this warning, the CFDT union expressed surprise at the cuts and vowed to fight back against them. "We've already contacted ministry officials and asked the government to take charge," the union said in a statement.
Separately, Fleur Pellerin, the French digital economy minister, told a parliamentary commission last week that French operators should be "patriotic" when choosing who will supply them with network equipment. Banning Chinese infrastructure suppliers is one way the government could support companies like Alcatel-Lucent, she said, according to Bloomberg.
In total, over 50 per cent of the cuts will take place in Europe, with Germany seeing 530, Belgium 290, and 180 in Spain. The company's U.S. workforce, with 14,000 employees, will remain almost intact as Alcatel-Lucent gains solid business from U.S. operators purchasing LTE equipment, according to La Tribune.
In July, Alcatel-Lucent reported a net loss of €254 million and had also burned through €500 million in cash in the second quarter of 2012. The only guidance it offered for 2012 was that the second half would show better margins than the first, according to Dow Jones Newswires.
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