Alcatel-Lucent will cut 15,000 jobs over the next two years, and create 5000 others as it seeks to focus on sales of IP networking and ultra-broadband equipment.
The company announced its plans for a net reduction of 10,000 jobs by the end of 2015 ahead of a meeting with staff representatives. In total, 15,000 jobs will go, but 5000 new posts will be created, an Alcatel-Lucent spokesman said. The company is not communicating on the nature of the new posts.
Operations around the world will be affected, including a net reduction of 4100 positions in Europe, the Middle East and Africa; 3800 in Asia-Pacific and 2100 in the Americas.
In France, the company intends to cut 900 jobs this year, primarily in support, administrative and sales functions. But it will also recruit 200 engineers and technicians, and create a new small cells competency center, a product area which the company has high hopes for as operators continue to try to keep up with growing data volumes. Another 900 jobs could be transferred internally or outsourced, the company said.
Alcatel-Lucent also plans to make its Villarceaux campus, near Paris, its largest research and development centre in Europe, concentrating activities for carrier customers there and at another site in the West of France, Lannion, which will specialize in ultra-broadband mobile access and subscriber data management.
The cuts are part of a big reorganization called "The Shift Plan" that Alcatel-Lucent announced in June. It aims to turn the struggling company into a leaner operation by repositioning it as "a specialist in the next-generation technologies of IP Networking, Cloud and Ultra-Broadband," including LTE networks, it said.
The company is on the right track with the reorganization, but now it will also have to execute on it, according to Gartner research director Sylvain Fabre. Nokia Solutions and Networks, formerly Nokia-Siemens Networks, has shown it can be done, he said.
"Laying off people is the easy part. The company has to show how, despite doing that, it won't lose customer focus, can maintain quality and release products without delays. If Alcatel-Lucent can do all those things, I think it will be in a good place," Fabre said.
Selling LTE networks to mobile operators around the world will be key to the turn-around, according to Fabre, and here Alcatel-Lucent has seen some success. "The company is getting into places it wasn't before," Fabre said.
With additional reporting by Peter Sayer in Paris.