Alcatel-Lucent (NYSE:ALU) confirmed it will cut 10,000 jobs as part of its "Shift" reorganization plan aimed at slimming down the company as it seeks to become more of a specialist focused on IP networking, LTE and small cells and move away from investing in legacy technologies.
The vendor said it's maintaining its goal of cutting fixed costs by up to $1.4 billion by the end of 2015. This cost cutting is part of a plan to reallocate R&D investment to next-generation technologies, reduce R&D spending on legacy technologies by 60 percent and cut administrative, sales and support functions.
Alcatel-Lucent said the 10,000 job cuts will be worldwide and will occur by the end of 2015. All geographic areas where the company operates will be impacted, with the reduction of 4,100 jobs in Europe, Middle East and Africa, 3,800 in Asia Pacific and 2,100 in the Americas. By the end of 2015, Alcatel-Lucent said it will halve the number of its "business hubs" globally.
CEO Michel Combes said in a statement that the vendor launched its 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."
These cuts come on top of the 5,000 job cuts that Alcatel-Lucent's former CEO Ben Verwaayen announced in 2012. Verwaayen stepped down earlier this year after failing to turn around the troubled vendor.
Alcatel-Lucent reported a wider net loss for the second quarter due to restructuring charges, but the company also unveiled a partnership with chipset maker Qualcomm (NASDAQ:QCOM) to develop small cells for 3G, LTE and W-Fi networks. Qualcomm also separately took a small stake in the vendor.
Recently, multiple reports have indicated that Nokia's (NYSE:NOK) board is considering a deal between the company's Nokia Solutions and Networks (NSN) unit and Alcatel-Lucent. However, the reports said no formal talks between the two companies are ongoing.
- see this release
- see this WSJ article (sub. req.)
- see this Bloomberg article
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