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Alcatel-Lucent to cut 10,000 jobs

Union workers displayed a “No to layoffs due to market forces” banner in Orvault, France. Employees weary of years of restructurings met the Alcatel-Lucent news with dismay.

Damien Meyer/AFP/Getty Images

Union workers displayed a “No to layoffs due to market forces” banner in Orvault, France. Employees weary of years of restructurings met the Alcatel-Lucent news with dismay.

PARIS — The French-American telecommunications equipment maker Alcatel-Lucent on Tuesday announced details of a major restructuring plan that includes 10,000 job cuts worldwide over the next two years.

The strategy is aimed at cutting fixed costs by 15 percent by the end of 2015, an amount currently equivalent to about $1.4 billion.

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“All geographic areas where Alcatel-Lucent operates will contribute” to the job cuts, the company said, including 4,100 positions in Europe, the Middle East, and Africa; 3,800 in the Asia-Pacific region; and 2,100 in the Americas.

The cuts work out to nearly 14 percent of the 72,344 worldwide employees Alcatel-Lucent reported at the end of 2012.

Only the size of the job losses had been in question after the new chief executive, Michel Combes, said in June that he would seek to transform the company over three years from a generalist telecommunications equipment maker into a specialist in the systems at the heart of next-generation networks, including cloud computing, Internet networking, and ultra-broadband access.

The telecommunications industry has become increasingly competitive as companies vie for orders from the likes of Vodafone and China Mobile as they upgrade infrastructure.

Nokia Solutions and Networks, one of Alcatel-Lucent’s major European rivals, announced 17,000 job cuts in 2011 as the Finnish firm carried out a major restructuring.

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Yet Asian rivals like Huawei and ZTE are aggressively expanding, and analysts question whether Alcatel-Lucent’s restructuring will allow it to compete successfully.

The company has made so-called fourth-generation cellphone infrastructure projects a priority, and said last month that it had secured a deal with China Mobile, the world’s largest carrier.

Alcatel-Lucent’s reorganization, Combes said, “is about the company regaining control of its destiny.”

“These changes have been a long time coming,” said Sylvain Fabre, a research director at the consulting firm Gartner in London. “The company needs to make choices about what areas it wants to prioritize.”

Alcatel-Lucent was formed from the 2006 merger of the French telecommunications infrastructure champion Alcatel and Lucent Technologies, a former AT&T unit.

Simon Poulter, an Alcatel-Lucent spokesman, said the 10,000 jobs would be eliminated through a combination of layoffs, outsourcing, and attrition. He revised his statement in an earlier interview that suggested an additional 5,000 jobs were possible.

Poulter said the company also expects to add 3,700 new employees to bring the skills of its workforce in line with research and development goals. He stressed there will be a net reduction of 10,000 jobs, but declined to comment further.

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