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Alcatel-Lucent Cuts Go Deeper — 7,500 Jobs Gone and Counting

Posted by ryuzaki0 on from the sorry-about-your-luck dept.

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."

10 of 78 comments (clear)

  1. Cost Savings?? by Anonymous Coward · · Score: 4, Interesting

    "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?

  2. Cutting jobs for out-dated / legacy systems by Jstlook · · Score: 2, Insightful

    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.
  3. Pay for nothing by manu0601 · · Score: 4, Insightful

    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.

    1. Re:Pay for nothing by Anonymous Coward · · Score: 3, Interesting

      This is the kind of thing that drives me quite crazy.

      If a certain percentage of people don't have jobs, they cannot purchase goods or services. If the percentage gets too high, you either have a very severe recession or a revolution. This outcome is undesirable to exactly 100% of any population. (Think last possible resort before suicide...)

      Either way, the economic damage this causes is immeasurable. Banks might be able to make some portion of profit even in a bad economy due to interest, but when people don't have enough money because they're all unemployed the service industry dies instantly and even the essential industries (food/fuel/clothing) see massive profit drops.

      All that said - economics looks to be a zero sum game. If people don't have money, they cannot buy anything. Why can't the big corporations see this? Seems to me they're being penny-wise but pound-shy, and trading short term, immediate gains for future bankruptcy and economic collapse.

    2. Re:Pay for nothing by manu0601 · · Score: 2

      The subcontractors have workers too.

      But you know how it works. Big corporation will outsource wherever in the world labor is cheapest. When workers attempt to get raises, factories get moved to poorer countries

      And the workers out of a job? They can find new work.

      If there are jobs available... when workers are to poor to buy goods, the trend is to cut more jobs because there is no outlet for worker's production.

  4. Legacy/OutDated != waste by sirwired · · Score: 4, Insightful

    For companies with a "well-established" product line, legacy systems are often essentially "free money", especially for telco equipment with embarrassingly long lifetimes.

    1. Re:Legacy/OutDated != waste by Anonymous Coward · · Score: 3, Interesting

      The telco gear makers would much rather that those telcos buy the new stuff as it's far more profitable. You're going to see companies like ALU and others in their space start to put the squeeze on these telcos that refuse to upgrade. The price of running your 30-40 year-old central office phone switch is going to go up.

      The biggest challenge and disappointment in the telco market is that the telco companies have shown such little interest in upgrading their networks. There has been a lot of speculative investment in telco gear makers in the last 10 years or so on the basis that we would be seeing billions of dollars invested in upgrades that have not materialized. Now what we're seeing is the demise of companies like Nortel and radical changes happening at ALU and NSN to stay afloat.

  5. Its Trickle Down Economics by Bob_Who · · Score: 4, Insightful

    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.

  6. The problem is by kilodelta · · Score: 4, Informative

    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.

    1. Re:The problem is by Anonymous Coward · · Score: 3, Insightful

      The "big boys" only use A-L. Cisco, while decent, is enterprise grade. Carrier grade (think NEBS) is a whole different story, and is far more expensive.

      A-L switches are different from Cisco in architecture. Very different. They are not meant for core work, but being able to handle tier 1 grade peering.

      A-L still has a big market coming up. 10GigE is starting to go from the backbone to the internal parts of a fabric. A-L also would profit by the converged SAN/network switch trend with FCoE and iSCSI.