Alcatel-Lucent to cut 10,000 jobs

Infrastructure vendor Alcatel-Lucent has announced that it will cut 10,000 jobs worldwide by the end of 2015. The reduction forms part of the firm’s ‘Shift’ plan to ensure a “sustainable financial future” and a “successful transformation of the company”.

In June this year the vendor announced its intention to reposition itself as a specialist in IP networking, cloud and ultra-broadband access, and in doing so drive greater profitability.

The job cuts will extend to all geographic areas where Alcatel-Lucent operates, with the removal of 4,100 positions 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 have halved the number of its business hubs globally.

Alcatel-Lucent has committed to achieving fixed cost savings of €1bn, or more than 15 per cent of fixed costs, by the end of 2015. The vendor plans to transform its R&D activities to generate greater efficiency and reallocate its resources to focus on future technologies it said. At the same time, it intends to make a significant reduction of fixed costs.

In order to achieve this, Alcatel-Lucent will reallocate R&D investment to next-generation technologies to represent 85 per cent of R&D spend in 2015, as opposed to 65 per cent today; R&D spend in legacy technologies will be cut by 60 per cent; and selling, general and administrative (SG&A) costs will be brought in line with industry standards.

Michel Combes, CEO of Alcatel-Lucent, said: “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,” he said.