France may try to block Alcatel-Lucent job cuts

Alcatel-Lucent's plan to cut 10,000 jobs worldwide has met with strong resistance in France, where the telecoms equipment manufacturer plans to cut 900 jobs and close or sell up to five sites.

Alcatel-Lucent unveiled plans Tuesday to cut a total of 10,000 jobs by 2015 as part of its "Shift Plan," in a move that CEO Michel Combes described as the company's "last chance" to turn its fortunes round.

The group plans to focus on high-growth areas such as LTE and high-speed broadband, and to lower fixed costs by more than 15 per cent, saving a total of €1 billion ($1.36 billion).

However, France's Prime Minister Jean-Marc Ayrault on Wednesday suggested the government under President Francois Hollande could use recent labour code changes to block any moves in France.

"If there is no majority agreement [with unions], the restructuring plan won't be accepted, because the law now gives the state the responsibility to act," Ayrault told Europe 1 radio, according to Reuters.

France's CFDT union has also said it would fight the plan to cut about 15,000 posts and create 5,000 new jobs, giving the overall loss of 10,000, Reuters said.

Combes said earlier that the situation is now critical for the company, which is still burning through cash of €700 million to €800 million a year. Although the maturity of the debt has been extended, it is also still a sizeable €5.7 billion.

"Everyone knows this plan is the last chance. The company is in a very serious situation," Combes told Le Monde newspaper.

Reuters noted that other government officials acknowledged measures were needed to save the group in which France has a 3 per cent stake. However, President Hollande's government is already under pressure over record unemployment and high taxes in France, and wants to save as many jobs as possible.

The new labour law would enable the government to check if the agreement signed with unions adheres to regulations, and if not, the state would then be able to check if the restructuring plan is appropriate given the group's assets and economic health, Reuters clarified.

"If there is no approval by the administration, the company cannot fire people," a labour ministry official told Reuters.

However, CGT union representative Stephane Dubled told the news agency that there is an element of grandstanding by Ayrault: "The state has some power in as much as it decides to use it ... but there hasn't been much experience of that so far," he told Reuters.

Alcatel-Lucent currently employs 72,000 people worldwide.

For more:
- see this Reuters article
- see this separate Reuters article
- see this Le Monde article (in French, sub. req.)

Related Articles:
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Alcatel-Lucent confirms it won part of massive China Mobile TD-LTE deal
Reports: Nokia's board considering NSN deal with Alcatel-Lucent
Alcatel-Lucent names new CFO amid turnaround plans

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