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whyiswhy 12/5/2012 | 3:14:46 PM
re: Alcatel-Lucent Job Cull Hits 12,500 Humm, I had forgotten about Scott's article, but yea.

OK, complex hypothesis revised:

Cold climates and stable soils lead to brick construction, buildings with basements and high levels of Radon.

Warmer climates and unstable soils (and the occasional earthquake) lead to buildings without basements made of concrete from the Permanente mine and trace levels of Cinnabar.

Radon saps East Coast VC energy by inducing pulmonary fibrosis and lowered testosterone levels. Propensity for chain smoking and tight fitting suits among East Coast VCs adds to theis effect.

Mercury vapors make West Coast VC's mad (as hatters) and thus willing to take crazy risks. Propensity for bike riding on mountain roads in tight biking outfits adds to this effect by exercise and altitude induced hypoxia.

Yes, the military contractors on the West Coast are pretty anal, but even in that industry the East Coast military contractors have a definite "edge". Refugees from military contractors are typically shunned by the "hotter" firms in the valley: they just don't "get it".

The East Coast has the mindset that a job is extremely hard to get, and once gotten is best guarded by writing policies and procedures up the ying yang, and playing office politics. The next job is about a hundred miles away in the next state. And the bill for the heating oil is due. Oh my.

The West Coast is California madness which is: "Badge? I dongot no stinkin' badge dude, I dongotta show you no stinkin' badge!" After work or between gigs just head for the beach and live in a tent, maybe drive to Napa and make some wine. No heating oil bills due. Surf's up, see ya'!

So that's why SV California is where risky crazy stuff like start-ups happen and why mad as hatter VC's ride their 15-speeds to work on Sand Hill Road.

That mix just can't happen on the East Coast.

flam 12/5/2012 | 3:14:45 PM
re: Alcatel-Lucent Job Cull Hits 12,500 flyingsausage,

Of course they have offices everywhere. But the culture which permeates the office comes from somewhere and it's top down.

The behavior which is rewarded is the behavior which will take place.

Russo is going to execute layoffs where she's most comfortable and familiar. In the US. Why else do you think Alcatel stuck her in that position? She has no other qualification.

jepovic 12/5/2012 | 3:14:45 PM
re: Alcatel-Lucent Job Cull Hits 12,500 Europe is not one country. The labor laws vary heavily. However, France is a country with labor laws which do come close to the american prejudice about Europe. But of course it's possible to fire people in France, it just takes a bit longer.

Looking at the what the two companies brought into the merger, I'd be surprised if LU wouldn't suffer heavier cuts. AL was a reasonably successful company, after all.

As far as the east coast-west coast debate (Dr Dre, anyone?), I just wanna remind you that Ericsson and Nokia have the coldest-climate HQs of all the major suppliers. They're doing just fine!
njguy 12/5/2012 | 3:14:45 PM
re: Alcatel-Lucent Job Cull Hits 12,500 "So when will ACLU ooops! I mean ALU resort to cutting those pension payouts???"

[NOTE: Hearsay, not fact.]

They may not have to. I'm told that LU hasn't paid into the pension since the AT&T days -- the money that was in there happened to do well in the market. Of course they skimmed any extra cream back into the business, so there's no padding if the investments stop performing.

If those investments stop performing and accounting forces them to do something, they will cut the pension before putting cash into it.

But if they happen to cut enough pension track employees, they won't have to. The LU pension is not linear, if you don't last long enough to hit certain age/years targets you get a pittance. Also, the younger/more-recent employees are not on a traditional pension track. So the pension has to cover a dwindling subset of employees. And if you can lay them off before they hit the big payout years...

Also, they haven't adjusted the pension calculation window in many years, which helps cover the lack of contributions (and could be considered a cut wrt inflation).

Anyway, I'm sure they'll be very careful not to hit the older workers harder. But any US bias in the layoffs is a pension track bias (globally). Win-Win!
flyingsausage 12/5/2012 | 3:14:45 PM
re: Alcatel-Lucent Job Cull Hits 12,500 East Coast vs. West Coast ?

Do you realize guys there is thousand of other regions everywhere else in the world ?
Big companies, especially ones like Alcatel-Lucent have offices and leaders in so many countries, it looks more like a chinese dragon than an East Coast US company or French company...

Looking at past history of both companies, and several lay-offs which happened at both sides in the past 5 years, those will be most likely spread all over the world. I don't think one region/country will suffer the most. As well, firing everyone in US doesn't make much business sense, especially with strong CAPEX spendings from North America operators. I expect lay-offs to be inline with operators spendings and existing ALU major customers. Obviously, countries/regions with the poorest earnings and margins will suffer the most.

Lay-offs are not impossible in europe, maybe more expensive than in other regions due to strict work laws. Just look at the news and the numbers of lay-offs in european companies which hapenned in the last 5 years, including Alcatel-Lucent. Proof is that negotiations between Alcatel-Lucent and workers unions already started in several european countries.

Indeed, lightreading could trying doing some more investigation journalism. So much informations are actually available on Google that they should be able doing more than copy/pasting a press release (my 5 years old sister can do this... :)
tsat 12/5/2012 | 3:14:44 PM
re: Alcatel-Lucent Job Cull Hits 12,500 Someone much smarter than me once said the key to California's innovation is simple: People here are not afraid of failure.

tsat 12/5/2012 | 3:14:44 PM
re: Alcatel-Lucent Job Cull Hits 12,500 > HP? Boeing?

yeah, you might view these companies as old and bloated.

But they are still incredibly successful by any corperate standard.

If that was the 2 worst companies you could come up with, then the West Coast must still be pretty good.

Now, don't go all Tupac on me for saying that.

Pete Baldwin 12/5/2012 | 3:14:43 PM
re: Alcatel-Lucent Job Cull Hits 12,500 From yesterday's NY Times, an essay lauding the way Silicon Valley nurtures great ideas:

whyiswhy 12/5/2012 | 3:14:41 PM
re: Alcatel-Lucent Job Cull Hits 12,500 Craig:

SV and VC roots go back to BBS and the start of Fairchild, so the story is a lot older than a decade.

Risk-culture has a lot to do with it: there is admiration for someone willing to drive an old car, live in a studio apartment, and working to midnight if "doing" a start-up. Also no shame in being at your fifth start-up and ten or more years into your career and still waiting for a payoff... just jealousy of those who get lucky do it on their first try.

That's hard to enculture, but once there, hard to beat.

flyingsausage 12/5/2012 | 3:14:41 PM
re: Alcatel-Lucent Job Cull Hits 12,500 Dear Flam,

Not having worked directly with Mrs Russo, I would not comment on her skills or qualifications. And obviosuly I don't rely on the press or rumours to learn it :)

However, for sure she got the very challenging job of restructuring Alcatel-Lucent, with obvious numerous lay-offs to be done (was the ultimate goal of the merger after all).

I'm not sure these days that the CEO of a huge company like ALU has full decision power and would manage it like an emperor, or like the "Spectre" organization in James Bond 007. Obviously she's not taking decisions alone, and relies on several teams in doing so.

You can be sure that former Alcatel executives will also do the part of their lay-offs jobs, and other regions (Europe, Asia, ...) will suffer as well.

ALU has a matrix structure, with on one hand the product divisions, and on the other hand the regional divisions. The product divisions are spread among several countries and regions, with maybe 20 R&D centers wolrdwide. Obviously, the less competitive products will suffer first. Knowing where a product is developped will allow to guess where lay-offs will occure. Looking at the recent rumours on the Evolium UMTS portfolio and knowing where it's developped, one can guess that even France will face massive lay-offs...
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