Alcatel-Lucent To Cut 10,000 Jobs

Reduction Tied To Telecom Vendor’s Broader ‘Shift Plan’ Reorganization

Alcatel-Lucent said it will eliminate about 10,000 jobs worldwide by the end of 2015 as the company looks to execute “The Shift Plan,” a wide-ranging reorganization  announced in June that aims to cut fixed costs by €1 billion (US$1.35 billion) and return the vendor to profitability.

Alcatel-Lucent outlined elements of The Shift Plan Tuesday, noting that it was to present them to its European works council.

Alcatel-Lucent said it will cut 4,100 positions in Europe, Middle East and Africa; 3,800 in Asia Pacific, and 2,100 in the Americas. Tied in, the company expects to halve the number of its global business hubs.

In France, its home country, Alcatel-Lucent intends to cut about 900 positions in 2014 primarily in support, administrative and sales functions while also recruiting 200 engineers with “new technical competencies.” By the end of 2015, the plan could also involve the transfer to partners or and redeployment of about 900 employees whose jobs will be retained inside or outside the company.

As part of The Shift Plan, Alcatel-Lucent outlined  other steps it will take toward reducing fixed costs savings by more than 15% by the end of 2015. Those include reallocating R&D investment to next-gen technologies, which should represent 85% of R&D spend in 2015, versus 65% today; trimming R&D spend in legacy technologies by 60%; and slashing administrative, sales and supports functions to bring those costs “in line with industry standards.”

Alcatel-Lucent noted that “transformation” of its R&D activities will focus on future technologies such as 4G and IP platforms, and include the creation of a new “small cells competency center” while also maintaining a focus on optics.

Alcatel-Lucent has previously said that The Shift Plan will also include a greater focus on the cable industry, where it’s had limited success. The company has yet to outline that strategy, but Infonetics analyst Jeff Heynen views EPON and DOCSIS Provisioning of EPON products as logical “entry points.”

“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,” company CEO Michel Combes said, in a statement.

Alcatel-Lucent isn’t the only major telecom and cable gear supplier in the midst of a reorg. Cisco last week began to notify employees or a layoff that will result in the loss of 4,000 jobs, equal to about 5% of the company’s global workforce.