Alcatel-Lucent CEO: Cut jobs, manage technology

Alcatel-Lucent CEO Ben Verwaayen, speaking at length with media and analysts for the first time since assuming the office in September, outlined a path to profitability that inevitably includes the loss of jobs.

In an announcement preceding Verwaayen's talk, Alcatel-Lucent said it would slice 1,000 management positions and 5,000 contracting jobs on top of the 16,500 positions the company has already said it would lop off by the end of 2009. These latest reductions, Verwaayen said during his press conference, will make the vendor "more agile" by eliminating in-house duplication. Investors didn't buy into the job cut strategy, noting that it didn't appear to be the strategic change the company needs in its business model.

Addressing strategic change, Verwaayen said that Alcatel-Lucent will predictably shift its product investment to technologies where it already has a leadership position or those targeted for development such as LTE, W-CDMA and enhanced packet core while cutting its business for CDMA, GSM and ADSL. Verwaayen indicated the strategy would produce "a new purpose for the company" which will more sharply focus on service providers, enterprises and the new telecom open environment.

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