Summary:

The cuts are intended to save on costs, but also to help Alcatel-Lucent transition from something of a networking generalist to a specialist in IP networking and “ultra-broadband” access.

Riding into the sunset: Shutterstock/outdoorsman

The French-American telecommunications equipment manufacturer Alcatel-Lucent is to cut around a seventh of its workforce by the end of 2015, as part of the “Shift Plan” introduced by its new CEO, Michel Combes. The cuts should reduce the firm’s fixed costs by €1 billion ($1.36 billion), or 15 percent.

The Shift Plan, intended to stimulate a turnaround for the loss-making company, involves Alcatel-Lucent becoming a specialist in the areas of IP networking and fixed and mobile “ultra-broadband” access. That means pulling out of certain other areas – Alcatel-Lucent won’t say which, because some may be killed off and others sold off, but we’re probably looking at areas such as microwave transmission, rich communications and so on.

In terms of cuts – or what Alcatel-Lucent chooses to call “key social actions” – this means a net loss of 10,000 jobs by the end of 2015. As a spokesman explained to me on Tuesday morning, that’s actually a gross loss of 15,000 jobs with the intention of “5,000 jobs created over time in the areas where we might have need.”

Currently, Alcatel-Lucent employs around 72,000 people around the world, and each region will see job cuts: 4,100 in Europe, the Middle East and Africa; 3,800 in the Asia-Pacific region; and 2,100 in the Americas. The firm will also halve the number of its offices globally.

France is obviously a key country for Alcatel-Lucent, and Reuters reports strong union opposition to the cuts there. These will involve the loss of 5 sites and 900 jobs, most of which will be in support, sales and administration. On the other hand, some of these employees could also be transferred to partners or other divisions within Alcatel-Lucent, and the company will also be hiring around 200 engineers and technicians “with new technical competencies” in France.

Here’s what Alcatel-Lucent said about its refocusing in France, in a statement that also gives a better idea of where the company is headed, technologically speaking:

“In France the industrial transformation will focus R&D activities on future technologies such as 4G and IP platforms, in particular with the creation of a new small cells competency center, an area of particular interest for the company. In terms of research, France will keep its focus on optics and strengthen it in mathematics, at the heart of next-generation network software.

“Business activities in France dealing with service providers will be concentrated in two main sites – Villarceaux, south of Paris, which will become Alcatel-Lucent’s primary R&D center in Europe and one of the world’s largest R&D campuses, and Lannion, which will specialize in ultra-broadband mobile access and subscriber data management (SDM) technologies.”

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