Alcatel-Lucent (NYSE:ALU) Cuts a Tenth of Workers in India

Despite its international deals on super-fast networks, Alcatel-Lucent ADR (NYSE:ALU, ALU message board) is conscious of its costs and will cut almost a tenth of its workforce in India. Senior executives from the company stated that demand for networks is not enough and cost cuts are nevessary.

In the summer, Alcatel-Lucent announced preliminary plans to shrink its global workforce by 5000 workers, as part of a plan to optimize costs. In this, the company became the second European networks vendor to cut staff, after Nokia Corporation (NYSE:NOK) said it would trim losses with 17 000 layoffs worldwite, a large part from its Nokia Siemens Networks division.

Alcatel's restructuring will not affect the research and development staff ot around 3500 specialists, but will affect mostly the maintenance workers for several local GSM and information networks.

Alcatel holds a relatively small 17% market share in the country, while the leader Ericsson (NASDAQ:ERIC) operates 65% along with Nokia Siemens Networks. All companies suffer as local telecoms curb spending on local networks and try to deal with too labor-intensive and expensive upkeep of existing networks.

One of Alcatel's biggest clients in India, Rcom, plans to outsource the network support in the near future.

Alcatel's shares fell by more than half in a year, despite the promising pickup in building 4G networks and super-fast fiber optic infrastructure worldwide.

The company traded at $1 at the end of last week, arriving at its previous close price.

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Source: http://www.hotstocked.com/article/39442/alcatel-lucent-nyse-alu-cuts-a-tenth-of-workers.html

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