Alcatel-Lucent SA plans to reduce staff by 10,000 as chief executive officer Michel Combes moves forward with cost cuts to turn around the unprofitable French network-equipment maker.
The cuts represent about 14 percent of Alcatel-Lucent’s workforce worldwide, based on the 72,000 employees the Paris-based company had as of December last year. About 4,100 jobs will be cut in Europe, the Middle East and Africa, 3,800 in Asia and 2,100 in the Americas, the company said yesterday in a statement.
Alcatel-Lucent is accelerating a turnaround bid after thousands of earlier job cuts, restructuring and asset sales failed to stem losses. Pressure on equipment prices and slower investment from European carriers, along with competition from China’s Huawei Technologies Co (華為), are forcing Alcatel-Lucent and rivals such as Nokia Oyj’s network-gear unit to reduce staff.
A slimmer organization could make Alcatel-Lucent a more attractive target for an acquirer. Nokia, set to become a manufacturer focusing on wireless networks after the sale of its handset business, is evaluating a linkup with Alcatel-Lucent, people with knowledge of the matter said last month.
Alcatel-Lucent is following in the footsteps of Nokia’s network unit, NSN, which in late 2011 started a savings program to cut 17,000 positions, or about 23 percent of its total. The Finnish company has since cut more positions, in excess of 20,000 during the past two years. Cisco Systems Inc, the world’s biggest maker of networking equipment, said in August it was cutting about 5 percent of its work force.
Nokia is considering options, including a combination with Alcatel-Lucent’s wireless-gear unit, one of the people said last month.
Nokia and Alcatel-Lucent together would be a stronger challenger to Ericsson AB, the biggest maker of mobile-phone networks, and Huawei. Alcatel-Lucent has contracts with Verizon Wireless and AT&T Inc in the US, a market where Nokia trails competition. No talks are under way, they said.
About a third of Alcatel-Lucent’s employees are in Europe and a third in the Asia-Pacific region. A quarter are in the US, where Alcatel-Lucent runs Nobel-prize winning research facility Bell Labs.
In France, Alcatel-Lucent plans 900 job cuts. Combes faces a tough stance from French President Francois Hollande, a Socialist elected last year after pledging to block “a parade of firings.” Alcatel-Lucent will discuss the cuts with union representatives today, a legal obligation in France for job cuts.
Based on last year’s reported revenue, the company had sales per employee of US$257,000, according to data compiled by Bloomberg. NSN had US$313,500 and Ericsson US$305,000.
TARIFF TRADE-OFF: Machinery exports to China dropped after Beijing ended its tariff reductions in June, while potential new tariffs fueled ‘front-loaded’ orders to the US The nation’s machinery exports to the US amounted to US$7.19 billion last year, surpassing the US$6.86 billion to China to become the largest export destination for the local machinery industry, the Taiwan Association of Machinery Industry (TAMI, 台灣機械公會) said in a report on Jan. 10. It came as some manufacturers brought forward or “front-loaded” US-bound shipments as required by customers ahead of potential tariffs imposed by the new US administration, the association said. During his campaign, US president-elect Donald Trump threatened tariffs of as high as 60 percent on Chinese goods and 10 percent to 20 percent on imports from other countries.
Taiwanese manufacturers have a chance to play a key role in the humanoid robot supply chain, Tongtai Machine and Tool Co (東台精機) chairman Yen Jui-hsiung (嚴瑞雄) said yesterday. That is because Taiwanese companies are capable of making key parts needed for humanoid robots to move, such as harmonic drives and planetary gearboxes, Yen said. This ability to produce these key elements could help Taiwanese manufacturers “become part of the US supply chain,” he added. Yen made the remarks a day after Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) said his company and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) are jointly
United Microelectronics Corp (UMC, 聯電) expects its addressable market to grow by a low single-digit percentage this year, lower than the overall foundry industry’s 15 percent expansion and the global semiconductor industry’s 10 percent growth, the contract chipmaker said yesterday after reporting the worst profit in four-and-a-half years in the fourth quarter of last year. Growth would be fueled by demand for artificial intelligence (AI) servers, a moderate recovery in consumer electronics and an increase in semiconductor content, UMC said. “UMC’s goal is to outgrow our addressable market while maintaining our structural profitability,” UMC copresident Jason Wang (王石) told an online earnings
MARKET SHIFTS: Exports to the US soared more than 120 percent to almost one quarter, while ASEAN has steadily increased to 18.5 percent on rising tech sales The proportion of Taiwan’s exports directed to China, including Hong Kong, declined by more than 12 percentage points last year compared with its peak in 2020, the Ministry of Finance said on Thursday last week. The decrease reflects the ongoing restructuring of global supply chains, driven by escalating trade tensions between Beijing and Washington. Data compiled by the ministry showed China and Hong Kong accounted for 31.7 percent of Taiwan’s total outbound sales last year, a drop of 12.2 percentage points from a high of 43.9 percent in 2020. In addition to increasing trade conflicts between China and the US, the ministry said
RSS