Alcatel-Lucent announces strategies to save $1.4 billion by 2015 and cut 10,000 jobs

Alcatel-Lucent, the loss making telecom equipment maker, on Tuesday announced its strategies to save $1.4 billion by 2015.

The Shift Plan announced on June 19 by its new CEO Michel Combes aims to ensure a sustainable financial future and a transformation of the company by repositioning it as a specialist in the next-generation technologies of IP Networking, Cloud and Ultra-Broadband Access. Profitability is a focus for the company.

Alcatel-Lucent announced that it will reallocate R&D investment to next-generation technologies which should represent 85 percent of R&D spend in 2015, as opposed to 65 percent today.

It will reduce R&D spend in legacy technologies by 60 percent.

The telecom equipment vendor will also reduce administrative, sales and support functions to bring SG&A costs in line with industry standards.

Alcatel lucent booth

Alcatel-Lucent will reduce approximately 10,000 jobs worldwide by the end of 2015. All geographic areas will contribute to this effort, with the reduction of 4,100 positions in Europe, Middle East and Africa, 3,800 in Asia Pacific and 2,100 in Americas.

By the end of 2015, Alcatel-Lucent will halve the number of its business hubs globally.

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. In terms of research, France will keep its focus on optics and strengthen it in mathematics, at the heart of next-generation network software, Alcatel-Lucent said in a statement.

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.

In France, the company intends to reduce approximately 900 positions in 2014 primarily in support, administrative and sales functions, as well as recruiting 200 engineers and technicians with new technical competencies.

By the end of 2015, the company transformation program could also result in internal mobility, transfers to partners and redeployments for approximately 900 employees whose jobs will be retained, inside or outside the company.

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