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AlcaLu Rules Out French Redundancies

Ray Le Maistre
2/27/2007

Alcatel-Lucent (NYSE: ALU) has vowed to the French Prime Minister, Dominique de Villepin, that none of the planned 1,468 job cuts in France will involve compulsory redundancy notices, the vendor announced Monday.

The company said its "French restructuring project will be based exclusively on volunteers" -- which may trouble Alcatel-Lucent employees in North America, where employment legislation is less restrictive and staff are less likely to be treated in the same manner. (See Alcatel-Lucent Considers Staff.)

And the mood of the vendor's North American staff will not be tempered by the running total of planned job cuts in Europe. About 39,000 staff, 43 percent of the company's total 88,000 headcount, are employed in Europe, yet only about 25 percent of the planned 12,500 job cuts are so far planned on the Old Continent. (See Alcatel-Lucent Job Cull Hits 12,500.)

No job cuts have been announced outside Europe so far, where 27,000 or so North American staff account for about 30 percent of the company's total, and about 23,000, or 26 percent, are in the rest of the world.

So where are the European cuts happening? In addition to the near 1,500 reduction in France, the company has already announced that about 140 jobs will go in Belgium, between 140 and 180 will be lost in The Netherlands, and 310 will go in Spain. (See ALU Restructures in France .)

And just today Alcatel-Lucent confirmed that the company's German operations will lose 870 staff, while analyst reports suggest 280 will be cut in Italy.

That means, so far, nearly 3,300 job losses, or about a quarter of the planned reductions across the company, are being planned in Europe, and although there are still other territories, such as the U.K., to be announced, that total is expected to form the majority of the European reductions.

That leaves more than 9,000 job cuts still to be announced, and in the U.S., the Communications Workers of America (CWA) is erecting its defenses against expected job losses and campaigning against what it calls the "stripping" of its members' rights.

Analysts at Dresdner Kleinwort believe the European restructuring plans aren't aggressive enough. "With only a quarter of the planned staff reductions slated to take place in Europe before the end of 2008, Alcatel-Lucent seems ill-placed to match the cost-efficiency and productivity levels of its immediate European and American peers," states the equity research firm in a research note issued Tuesday.

"We believe far more forceful measures are required on the continent but fear that management, against steadfast resistance from the unions, is at risk of missing the stated targets in the region," concludes the Dresdner team.

Meanwhile, Alcatel-Lucent faces the prospect of further industrial action in Europe. The French union Confédération Française Démocratique du Travail (CFDT), known as the French Democratic Confederation of Labour in the English speaking world, has already held two strikes, on February 15 and 23, and has denounced the planned 12,500 job losses as "unacceptable."

— Ray Le Maistre, International News Editor, Light Reading

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jeffdad2
jeffdad2
12/5/2012 | 3:13:37 PM
re: AlcaLu Rules Out French Redundancies
The basic thrust of this article sounds right, but some of the headcount numbers seem outdated. The quoted figures of 88K headcount (39K in Europe, 27K in North America, and 23K in rest of the world) probably come from a Lucent "14A" SEC filing on 4/19/06, reflecting conditions at the end of 2005. Two major changes since then are Alcatel's transfer of its transportation, security and space assets to Thales (along with ~11,000
employees) and Alcatel's absorbing NT's UTRAN assets (along with ~1,800 employees). I think more likely current numbers are 28K in Europe, 27K in North America, and 24K in rest of the world, for a total of 79K. So, Europe is probably taking a hit of a somewhat under 15%. This probably leaves North America to absorb a cut of almost 30%. Obviously, the basic point that North American employees should be nervous seems correct.
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