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Alcatel-Lucent Cuts Go Deeper — 7,500 Jobs Gone and Counting
Dawn Kawamoto writes "Alcatel-Lucent has cut 7,500 jobs since the start of the year — a couple thousand more than what employees of the embattled telecom equipment maker may have been expecting. Last summer, Alcatel-Lucent said it expected to cut over 5,000 jobs by the end of 2013. Well, cuts have gone deeper than that, and the company's newly minted CEO, Michel Combes, told Wall Street during the second quarter earnings call Tuesday to expect additional cuts and the related cost savings in the coming quarters."
"expect additional cuts and the related cost savings in the coming quarters"
What about the coming years? I'm not familiar with this particular situation but I've seen plenty of companies happy to give up everything in the long term for short term gains to satisfy Wall Street. Is that the case here?
Looks like they're dropping dead waste, and putting more money into R&D.
Good Job! Sorry if anyone here was affected.
---jstlook ---For that is the way of Elves, for they say both yes AND no, and mean every word of it. --- J.R.R.T.
Big corporation reduce workforce to increase profit. At some point they will produce everything for cheap using abroad subcontractors. That means a lot of money goes straight to shareholders without having any chance to go in workers' pockets. And since workers are also consumers, this badly impact the economy
At some point we will need to find a way to tax the profit and reinject money in consumer's pockets so that they can purchase the goods produced.
Bell Labs / Lucent recruited heavily from my school, it being one of the two nearest engineering schools to Lucent HQ. (We had Dennis Ritchie and Bjarne Stroustroup give lectures at ACM meetings, and we had several Lucent PHd's as adjunct faculty) Lucent had a minimum GPA requirement of 3.0 in order to obtain an interview. I had a 2.94, therefore being .01 short of rounding up to a 3.0. We are talking a single exam question in frosh calc here... I was very disappointed at the time.
I was substantially less disappointed after the telco crash. And lets just say the last of my regrets are now gone.
For companies with a "well-established" product line, legacy systems are often essentially "free money", especially for telco equipment with embarrassingly long lifetimes.
This is a spiral and this will affect all of us. Take this 4 sure. These companies do evrything to have good face in the market. Lucent still will not turn around ss because of lack of product pipeline. Any quick acquisition, may be CEO is making the company lighter? Time will tell.
When Apple will completely move production from China to US - will they employ more Americans or less than now?
Sure looks like the same trajectory... Successful product lines like the 7700 will eventually be sold off/spun off to get cash injections and pay off maturing debt that revenue no longer covers.
Employees with a clue have already left, leaving the same old situation behind. Layers of redundant middle management who will feed at the trough all the way until chapter 11. Lazy/disaffected employees who are happy to cash in a nice paycheck courtesy of the dotcom boom and some arcane skillset that once justified said salary will skulk around the halls bemoaning what has become of their once great employer, whilst drinking coffee and chit-chatting all day long.
Finally, the left overs - the employees that the departed did not want to head hunt and bring with them, the dead weight if you will, will sit around waiting for the axe to fall wondering why no one wants to pay them some obscene pay-packet to continue doing some job a graduate could do better for 1/2 the salary.
I wish the recently retrenched all the best - brush up your skills a bit and you will get back into it; plus you well sleep well knowing that ALU has probably done you a favor in the long run.
Screw the employee, pay the shareholders.
After they fire you they'll raid your savings and 401k, sink your mortgage under water, and let you go without viable medical options.
Profit for few at the expense of many. That the corporate way.
Time to eat the rich and banish k street.
That the pbx and carrier level gear that they make is built to last 30 years or more. Kind of hard to up-sell when what's in place will provide decent service for that amount of time.
And having administered quite a few at&t/Lucent PBX's like Definity and Prologix, I can tell you I've NEVER seen one fail. Some have been in place for the better part of three decades now and they are still going strong.
Anytime a tech company starts being run by business types they tank. The business guys have no idea what really drives the company and inevitably see R&D as an unnecessary expense. HP went from a tech innovator to a company pimping branded products made in china and designed by monkeys.
It's only when you get that rare combination of technical AND business savvy that you get an Apple or HP in the first place.
I have mod points. The reign of terror begins now.
Maintenance charges are pure gold. Old gear for which development costs were paid off decades ago is pure profit. It has essentially zero R&D expense, and continuing maintenance, licensing, and often leasing charges are associated with relatively little actual expense.
All companies that want to continue on indefinitely as a going concern need new product to sell, of course. But that doesn't mean the stuff they sold a long time ago isn't "The Gift That Keeps On Giving."
Disposing of your human capital is not the way to gain market share. The way is: develop standards, innovate. Alcatel Lucent will go down if and when they persist on this heading.
Religous speak to God. Insane are spoken to by God. When all shut up, one can finally hear Shostakovich in peace
the requirements of the FCC for durability and failover practically keep equipment operable for longer than 15 to 20 years in the backbone. all you need to do is replace the failures, periodically upgrade the software to clear bugs and enable new services, and for that you need infrastructure partners in it for the long haul. they get paid millions of bucks a year for service contracts.
a company that does not play by those rules gets crossed off the bid list. a customer that does not renew the service contracts sees the product line discontinued. that is the bargain the players make to keep things going. kind of like the mutual squeeze in large-scale computing.
if ALU backs out, expect another Nortel.
if this is supposed to be a new economy, how come they still want my old fashioned money?
that's how it works. much of the time, the service contracts are lagniappe for the manufacturers in every field. there are also a tangle of legal service requirements that mean long after a provider wants to dump a bunch of power-sucking light-blinking money hogs, they have to maintain it because it is tariffed and posted for resale.
wireline companies would probably like to blow the central offices out and go VoIP all the way, and the technology is now mature for everything except 911 location information at the caller's phone. but tangles of law and regulator FUD get in the way.
so failing to support the old gear in this field dooms your chance to sell new gear. and ALU has some nicely featured stuff recently out that fills a lot of holes better than Cisco.
they're in the business of walking a fine line. ITT couldn't, so they sold their telco stuff to France Telecom's Alcatel decades ago. Newbridge couldn't or wouldn't certify for Y2K, so they got dumped into the whirlwind, and Alcatel bought 'em for a song. Lucent lost the knack, so we have Alcatel-Lucent. Nortel just plain couldn't get up after falling off the wire any number of times, so they got chapter-7 firesaled in pieces.
that's the business. every 2 or 3 years, the "new stuff" is supposed to blow out the old stuff. except the old stuff is basically the foundation of civilization's communication, and it gets riveted into regulations. until it's all IP or whatever next-gen becomes with the world's consensus, that won't change.
if this is supposed to be a new economy, how come they still want my old fashioned money?
ALU is doing a lot of things right, from the customer standpoint. they have the usual and expected number of "butches" here and there, as all tech equipment that does anything more complicated than put "hello, world" up on the screen does.
the trick is, how to get rid of dead weight that costs a ton and does nothing.
way I see it, there are a lot of extra VPs, senior directors, and district/area/product/country presidents that should be holding "slow" signs at a road project, for the pay they are more worthy of earning.
somehow, the C-levels don't buy the notion that when you need a tech on site at 3 in the morning, that's more precious. I guess it's because they can't reserve the whole deck of the cruise ship or the whole wing of the island resort for offsites if they don't have enough reservations.
YMMV
if this is supposed to be a new economy, how come they still want my old fashioned money?