French telecom equipment maker Alcatel Lucent (NYSE:ALU) revealed on Tuesday plans to slash about 15% of its global workforce in an effort to stem billions of euros in losses.
Alcatel Lucent said it will cut a net total of 10,000 jobs and eliminate half of its business hubs to refocus on new technologies and businesses.
The company will axe 15,000 jobs from older technologies, such as second- and third-generation wireless equipment, while adding 5,000 positions in areas that hold greater potential, including Internet routing.
Alcatel Lucent has recorded just one full-year profit since its creation seven years ago. Chief Executive Michel Combes has led a restructuring effort -- called the Shift Plan -- that aims to cut $1.36 billion in costs, sell $1.36 billion in assets and turn the company’s attention away from older products.
“To carry out this plan we must make difficult decisions and we will make them with open and transparent dialogue with our employees and their representatives,” Combes said in a statement. “The Shift Plan is about the company regaining control of its destiny.”
The latest round of job cuts will be focused on Europe, the Middle East and Africa, where 4,100 net jobs will be eliminated. France will lose about 900 jobs, while 2,100 jobs will be cut in the Americas.
Alcatel Lucent already moved to cut 5,000 jobs. As of Dec. 31, the company had 72,344 global employees.
News reports last month indicated that Nokia (NYSE:NOK) had internal discussions about a tie-up with Alcatel Lucent once its $7.2 billion deal with Microsoft (NASDAQ:MSFT) is completed.
Nokia agreed to sell its smartphone business to the software giant, leaving the Finnish company with its telecom equipment business. It recently completed a deal with Siemens (NYSE:SI) for full ownership of what is now Nokia Solutions and Networks.
In an interview with The Wall Street Journal on Tuesday, Combes would not comment on a potential deal with Nokia.
He also said Alcatel Lucent will look to move its headquarters from Paris to a cheaper location.
Shares edged up three cents to $3.88 in early morning trading. The stock has soared 178% on the year.