Alcatel-Lucent cuts jobs, focuses attention on three sectors

Alcatel-Lucent is naming enterprises as one of three markets it will focus on as it lays off 1,000 more workers and makes cuts in other areas in an attempt to turn the company around.

Enterprise and service provider gear as well as selected vertical markets will receive the most attention, the company announced Friday as it tries to regain profitability. The company had a net loss of 40 million Euros (Cdn $67 million) last quarter.

The company says it will develop products in these three areas to support use of the Internet by fixed and mobile devices, ensure QoS, privacy and the integrity of billing for Web services.

A year ago, Alcatel-Lucent announced 4,000 job cuts, after losing $468 million in one quarter.

The company was formed two years ago by a merger of Murray Hill, N.J.-based Lucent Technologies Inc. and French telecom equipment maker Alcatel.

Alcatel also bought Newbridge Networks Inc. of Ottawa in early 2000.

In a broad description of its strategy, the company says it will strive to create an open architecture on which Web 2.0 applications can run. “We want to stimulate a sustainable business model for the industry that will fuel innovation and the capital investment required to expand the overall web experience to more people and businesses,” and says it will partner and collaborate to do so.

In addition to the 1,000 white-collar layoffs, Alcatel-Lucent will terminate half of its 10,000 consultants in an effort to create nearly US$1 billion in savings over the next year.

Other product areas that will be trimmed are its CDMA 1x and GSM wireless gear, as well as ATM, ADSL and DLC. It will cut back in expenses for WiMAX, CPE, traditional core carrier infrastructure, non-IMS based carrier gear and some legacy applications.

In addition the company will narrow its R&D efforts to optical, IP, broadband and applications enablement in a further attempt to save.

The company already announced plans to reorganize its structure, creating a carrier product group, a services group, an applications software group and an enterprise product group. At the time it made that announcement, the company also named four presidents to run the groups. It also announced another half dozen replacements for other executives to take effect Jan. 1.

Still the company says it hopes only to break even next year, returning to profitability in 2010.

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