Paris, France-based telecommunications giant Alcatel SA announced on July 25 it would lay off 500 employees in its Canadian operations.

In its Ottawa-based Alcatel Canada Inc. headquarters, the company employs approximately 4,500 people.

Besides the Ottawa location, Alcatel maintains offices in Toronto, Montreal, Vancouver and Calgary.

With all of the layoffs and other cost-cutting measures going on at telecommunications companies, is this something that was expected?

“I think in the sense that anybody who thinks there’s any part of the worldwide telecom industry that’s going to be immune to the downturn is smoking something funny,” said Ian Angus, president of Ajax, Ont.-based Angus Telemanagement Group Inc. “For a while, you were hearing from some of the European companies that they weren’t being affected, but of course they are. And especially anybody that manufactures and tries to sell into the North American market is being hit very directly.”

He added that Alcatel’s primary business centre for its North American operations is in Canada – a result of Alcatel’s acquisition last year of Newbridge Networks Inc. Angus said this specific set of layoffs at this specific time weren’t expected.

This is not the first or the only layoffs Alcatel has made in North America. At the beginning of June, the company announced it would be laying off 900 employees in the U.S. and shutting down three facilities in Portland, Ore., Milpitas, Calif., and Andover, Mass. The U.S. layoffs were announced only days after the merger talks between Murray Hill, N.J.-based Lucent Technologies Inc. and Alcatel were halted.

According to Iain Grant, managing director of The Yankee Group in Canada of Brockville, Ont., “Alcatel’s position in North America is more precarious than it is in Europe, where they are the dominant supplier. I think they’re pretty well-positioned in North America. It’s just that the North American market isn’t quite as bubbly as it was two years ago.”

And because the majority of Alcatel’s North American jobs are in Canada, the Great White North is feeling the impact in the company’s cost-cutting measures.

Grant added that it wasn’t much of a surprise Alcatel cut positions in Canada. Its cost-management initiatives are taking place all over the world.

“The only thing that’s surprising in telecom this year is good news,” Angus said. “This is a year of serious retrenchment.”

Serving mostly the high-speed access and optical transport markets, Alcatel has approximately 130,000 employees around the world and has offices in 130 countries. According to a company press release, the layoffs are part of “cost management initiatives.” The company did not return Network World Canada’s calls.

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