Alcatel posts sharp Q2 loss, says will cut 5,000 jobs
PARIS—The telecommunications equipment maker Alcatel-Lucent said Thursday that it would cut costs by eliminating 5,000 jobs by the end of 2013.
Alcatel, which posted a second-quarter loss of 254 million euros ($309 million), did not provide details on the job cuts but did tell AFP that they would not affect the group’s research and development capacities.
Alcatel-Lucent employs 78,000 people worldwide.
The company’s chief executive Ben Verwaayen said it was launching a restructuring plan dubbed “The performance program to accelerate our transformation and reduce costs by 1.25 billion euros by the end of next year in order to keep ahead of market realities.”
Verwaayen stressed that “these times demand firm actions,” before adding that the program “will involve shrinking our employee base and exiting certain non-profitable contracts.”
After warning on July 17 that it would miss its 2012 profitability target, Alcatel said that it suffered a second-quarter net loss of 254 million euros, compared with a small profit of 43 million in the same period a year earlier.
The company’s operating result showed a loss of 86 million euros, against a year-earlier profit of 22 million, on sales that fell by 7.1 percent to 3.5 billion euros.
Alcatel said it continued to cut its debt and was now aiming for “a strong positive net cash position at the end of the year 2012.”
Investors shunned the stock, however, and Alcatel shares showed the biggest loss in early trading on the Paris stock exchange, losing 6.97 percent to 0.814 euros in a market that was 0.10 percent higher overall.
