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    Alcatel-Lucent CEO: Without Job Cuts, Company Could ‘Disappear’

    Written by

    Jeff Burt
    Published October 15, 2013
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      Alcatel-Lucent’s plan to cut another 10,000 jobs is touching off worker protests in France while the embattled company’s CEO argues that without substantial expense reductions and job cuts, the networking equipment vendor may not survive.

      CEO Michael Combes and other company officials on Oct. 8 told its European works council about the planned layoffs and other moves that are part of Alcatel-Lucent’s Shift Plan restructuring initiative. Through the plan—which was introduced in June two months after Combes took over as CEO—company officials hope to save at least $1.36 billion in costs by the end of 2015. They also hope to bring in another $1.3 billion by selling various assets over the next two years.

      The layoffs include 900 lost jobs in France, where the company is headquartered, fueling a worker protest. Union official Herve Lassalle criticized Combes and other executives, saying that workers “deplore the absence of vision in the management suite,” according to a report in Bloomberg.

      However, Combes reportedly said during an interview on Europe 1 radio that without making such cuts, “this company could disappear.”

      The company, which has about 72,000 employees, was created in 2006 through the merger of Alcatel and Lucent Technologies, introducing what executives expected to be a networking giant that would compete with the likes of Cisco Systems and Ericsson. However, the company has struggled financially from the start, with its only profitable year coming in 2011.

      According to a report in Reuters, Combes told French politicians that Alcatel-Lucent has lost $1.08 billion per year since the merger, and noted that the Shift Plan is the sixth restructuring plan at the company since 2006, and many of those plans included job cuts.

      “I don’t plan on there being a 7th” restructuring plan, Combes told the parliament’s economic affairs committee, according to Reuters. “I’m convinced that we have a plan that is coherent, that is complete, that addresses all the problems the company is facing and can get it back on its feet.”

      Jeff Burt
      Jeff Burt
      Jeffrey Burt has been with eWEEK since 2000, covering an array of areas that includes servers, networking, PCs, processors, converged infrastructure, unified communications and the Internet of things.

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