Following a disappointing second quarter in which France-based Alcatel-Lucent (NYSE: ALU ) reported a $1.2 billion loss, due largely to several significant charges taken in the three-month period, CEO Michael Combes issued a statement today outlining steps to be taken under the global communications company's "Shift Plan," including cutting 10,000 jobs worldwide by the end of 2015.
The Shift Plan, launched last June, is Alcatel-Lucent's internal mandate to better focus its business lines on next-generation technologies and to improve financial performance. In its effort to reduce expenses by $1.36 billion as of year-end 2015, Alcatel-Lucent said in its statement today that it will cut 10,000 jobs globally by the close of that year: 4,100 in Europe, the Middle East, and Africa; 2,100 in the Americas; and 3,800 in its Asia-Pacific markets. During the same time period, Alcatel-Lucent also said it intends to "halve the number of its business hubs globally."
Also included in the Shift Plan is a realignment in Alcatel's business focus from information technology generalist to becoming a specialist in cloud, Internet Protocol networking, and broadband access technologies and services, the company said. In keeping with the new business objectives, Alcatel will reallocate its research and development spending to emphasize next-generation technologies.
Commenting on the job cuts and business realignment, Combes was quoted as saying: "To carry out this plan we must make difficult decisions and we will make them with open and transparent dialogue with our employees and their representatives. The Shift Plan is about the company regaining control of its destiny."
In a sign that the layoffs will likely face stiff resistance, especially in Europe, elected officials from western France, the site of an Alcatel-Lucent plant, urged the company to abandon the restructuring plan. The company has about 72,300 full-time employees, according to Yahoo! Finance.
The company has struggled since its inception in 2006, when France's Alcatel and the U.S.'s Lucent merged. The savings anticipated by combining research and development costs and reducing staff were quickly offset by pressure to lower prices amid increasing competition.
-- Material from The Associated Press was used in this report.