Troubled telecoms: Alcatel-Lucent job cut protest

Oct 15, 2013 by Lori Hinnant

Wearing black trash bags marked with crosses, more than a thousand Alcatel-Lucent workers marched to the Eiffel Tower on Tuesday, staging a mock funeral that the chief executive warned could easily become a reality for a company with its roots in the earliest days of the telephone.

The employees were protesting Alcatel-Lucent's plans to cut 10,000 jobs around the world and save 1 billion euros ($1.6 billion) in costs. Like many former pioneers of the communications industry, Alcatel-Lucent is having a hard time adapting to seismic technological shifts.

"This could disappear," CEO Michel Combes told Europe 1 radio on Tuesday ahead of the protest that ended at Alcatel-Lucent headquarters near Paris' most famous monument. "This company hasn't made money since 2006."

Combes blamed bad decision-making since the 2006 merger of France's Alcatel and U.S.-based Lucent Technologies, such as abandoning high-growth countries, a lack of innovation and a failure to make the leap to new cell technology, such as 3G.

Jeff Kagan, an analyst who follows Alcatel-Lucent from the U.S., said the company focused too much on voice technology while the industry was "quickly evolving into a data space" instead.

"I don't think they can transform the industry, and they haven't done a great job of transforming themselves," Kagan said.

Combes took over in April and faces resistance from the French government, which has warned it could try to block, or delay the planned layoffs.

The company's troubles are in sharp contrast to the glory days of Bell Labs, Lucent's research arm, which won seven Noble Prizes and whose earliest iteration was founded by Alexander Graham Bell, the inventor of the telephone.

Other phone companies facing difficulties:

BLACKBERRY

The one-time leader in smartphones published Tuesday an open letter in journals around the world to reassure customers. Blackberry has been laid low by a new generation of touchscreen phones, starting with the iPhone in 2007. It has yet to recover and lost $1 billion in the last quarter alone.

NOKIA

Microsoft reached a deal earlier this year to buy Nokia's for $7.2 billion. Both companies were once dominant and are now trying to rebrand and claw back market share.

MOTOROLA

Google Inc. paid $12.4 billion last year for Motorola Mobility. Kagan said Google's dominance in the tech world will insulate Motorola from some of the pressures faced by competitors.

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