Alcatel-Lucent plans overhaul, big cost cuts (Update)

Jun 19, 2013

Telecommunications equipment manufacturer Alcatel-Lucent launched a major effort Wednesday to boost its fortunes by shedding businesses and jobs as part of a deep cost cutting program.

Shares rose nearly 5 percent on the announcement, as investors hope that the plan brings the solid profits that have eluded the Paris-based company for years.

Alcatel-Lucent, which supplies operators such as AT&T, Verizon and Orange, said it will sell off more than 1 billion euros ($1.33 billion) in assets through 2015, and hopes for 1 billion euros in cost savings. It is also restructuring debt.

The company said it will cut back on research in older technologies and focus on its most promising sectors, such as Internet routing and cloud systems, "to address the explosive growth in bandwidth-hungry data traffic."

Sales at the company nearly stalled in the first quarter at 3.2 billion euros, prompting a wider-than-expected loss for the quarter of 353 million euros.

The company has faced years of nearly uninterrupted losses and successive rounds of cost-cutting and layoffs since the 2006 merger of U.S.-based Lucent Technologies and France's Alcatel.

CEO Michel Combes had promised a turnaround plan for this summer, after restructuring efforts under his predecessor failed to get the company back in profit.

The company said the new plan will include layoffs, site closures and outsourcing of some manufacturing. Combes did not indicate how many jobs would be lost from its global workforce, which included 72,000 employees as of the end of last year.

Explore further: Sony's PlayStation back online after Christmas hack

2 /5 (1 vote)
add to favorites email to friend print save as pdf

Related Stories

Higher prices for MS drug help drug firm Merck

May 14, 2013

(AP)—Higher prices for its multiple sclerosis drug Rebif helped German pharmaceutical and high-tech materials company Merck KGaA post a 54 percent rise in first-quarter profit.

Nokia might sell HQ: report

Oct 03, 2012

Struggling Finnish mobile phone manufacturer Nokia might sell its headquarters on the outskirts of Helsinki, a senior company official was quoted as saying on Wednesday.

Alcatel-Lucent boss leaving as losses mount

Feb 07, 2013

Alcatel-Lucent CEO Ben Verwaayen is leaving the loss-making French-U.S. telecommunications gear maker after a failed four-year bid to turn the business around.

Philips profits down in Q1 while LED sales jump

Apr 22, 2013

Dutch electronics giant Philips announced Thursday first quarter profits that were down 12 percent from the same period a year earlier, and confirmed that it expected only "modest" growth in the first half of 2013.

Recommended for you

Sony's PlayStation 'gradually coming back'

Dec 27, 2014

Sony was still struggling Saturday to fully restore its online PlayStation system, three days after the Christmas day hack that also hit Microsoft's Xbox, reporting that services were "gradually coming back."

Uber broke Indian financial rules: central bank chief

Dec 27, 2014

India's central bank chief lashed out at Uber, already under fire over the alleged rape of a passenger, saying the US taxi-hailing firm violated the country's financial regulations by using an overseas payment ...

Taxi app Uber defies ban in Spain

Dec 26, 2014

Smartphone car-ride service Uber vowed Friday to keep operating in Spain despite a ban following a lawsuit by taxi drivers and said it would fight the case in court.

User comments : 0

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.