Alcatel-Lucent, which has cut its workforce by 5,000 already this year, has added another 4,000 to its planned job cuts after making a third-quarter loss amid tough market conditions that have even caught up with market leader Ericsson. It posted a loss of 258m euros (372.1m) for the quarter, down from income of 532m euros ($767.3m) on revenue that fell 11.4% to 4.35bn euros ($6.27bn).
And just as Ericsson parted company with its longstanding CFO last week, so Alcatel-Lucent said its CFO Jean-Pascal Beaufret is leaving the company to pursue other opportunities. He has been replaced by Hubert de Pesquidoux who currently heads the enterprise group.
With French trades unions blaming the merger as responsible for the company’s descent into hell, CEO Pat Russo has been forced by the board to come up with further restructuring to try to recover competitiveness in a market where Ericsson has been regaining its scale advantages over its newly merged rival.
Russo said market conditions remained difficult, with continued pressure on revenues and margins due to intensified competition and some slowdown of spending in North America.
Alcatel-Lucent has put in place a three-part plan to improve profitability and reposition the business. The aim is to achieve further savings of 400m euros ($576.9m) by the end of 2009. It plans to streamline its core carrier business and accelerate product cost improvements with increased portfolio focus on IP transformation of wireline and wireless networks.
It also plans a push for the enterprise markets and the public sector, and to increase its emphasis on services.
While it said it expects fourth-quarter revenue to show a seasonal increase, for the year as a whole it said revenue is likely to be flat.