Newspaper article International Herald Tribune

Another Round of Cost Cuts for Alcatel-Lucent ; Shares Jump on Hopes That Layoffs and Asset Sales Will Restore Profit

Newspaper article International Herald Tribune

Another Round of Cost Cuts for Alcatel-Lucent ; Shares Jump on Hopes That Layoffs and Asset Sales Will Restore Profit

Article excerpt

The chief executive of the French-American telecommunications company also said he would focus on sales of broadband equipment to France, China and North America.

Shares of Alcatel-Lucent, the troubled French-American maker of telecommunications equipment, rose more than 6 percent in Paris on Wednesday after its chief executive presented a package of cost cuts, job reductions and asset sales designed to raise at least EUR 2 billion by the end of 2015.

The chief executive, Michel Combes, a former Vodafone senior executive hired in February, said he would refocus the company on selling wireless broadband equipment to carriers in France, China and North America as an increase in mobile data traffic prompts network operators to expand and upgrade their grids. Alcatel-Lucent had a loss of EUR 1.4 billion, or $1.9 billion, last year.

The company, created by the merger of the French company Alcatel and the North American group Lucent Technologies in 2006, has struggled to expand sales and restore profitability. It has streamlined a costly inventory of old and new mobile network equipment technologies while fending off intense competition from larger rivals like Ericsson, Huawei and Nokia Siemens Networks.

"There is optimism today and investors are hopeful that this will finally turn around the company," said Aleksander Peterc, an analyst in London for Exane BNP Paribas. "There is new management and a new plan, which is more ambitious than the previous one."

Alcatel-Lucent stock closed 6.2 percent higher at EUR 1.50 per share.

Mr. Combes, speaking to financial analysts in Paris, said he planned to cut operating expenses by EUR 1 billion annually by the end of 2015 and to raise at least EUR 1 billion by selling businesses. He did not specify where he would cut expenses or which businesses he intended to sell, but said the cuts would include more job reductions at the equipment maker, which employed 72,000 people at the end of 2012.

"We intend to reduce the cost structure of the company," Mr. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.