Alcatel-Lucent lays off 5000 after loss

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Alcatel-Lucent lays off 5000 after loss
Alcatel-Lucent CEO Ben Verwaayen. Source: Alcatel-Lucent

Australian jobs safe?

French-American network equipment supplier Alcatel-Lucent has unveiled plans to slash its global workforce by 5000 people by the end of next year after it announced a set of mixed financial results.

The company posted an operating loss of 31 million ($AU36.6 million) in the last quarter, resulting in a net loss of 254 million ($AU300 million).

The move to reduce its 76,000-strong staff base is hoped to help a 1.25 billion ($AU1.48 billion) over the next 18 months.

CEO Ben Verwaayen said Alcatel-Lucent was doing particularly well in next-generation fibre-optic networks and broadband access globally but conceded a "deteriorating macro environment" and competition in some markets meant the company had to slash costs.

A spokesman for Alcatel-Lucent Australia played down the effect the headcount cuts would have on the company's Australian and New Zealand operations.

"Details have not been announced on a global basis, however I would stress that we have considerable strength and opportunity for growth in our local business," he said.

As part of the cost-cutting exercise, Alcatel-Lucent intends to exit unprofitable managed service contracts as well as markets where the telco vendor isn't making headway. Alcatel-Lucent has not said which customers it intends to axe or the unprofitable markets it will leave.

Alcatel-Lucent said its revenues in China declined 21 percent, but it maintained the rest of the Asia-Pacific region was "resilient". It noted "good traction in Japan and Australia" — likely boosted by ongoing contracts for the National Broadband Network and recent wins in mining.

The company also supplies large parts of Telecom New Zealand's fixed and wireless network, including contracts for the telco's XT 3G mobile voice and data services.

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