Struggling telecommunications company Alcatel-Lucent has confirmed earlier media reports it's shedding some 10,000 jobs in a bid to drastically reduce post-merger costs. Investors sent the firm's shares up on the news.
Alcatel-Lucent officially announced Tuesday it was planning to reduce its global workforce by 10,000 - cutting 15,000 jobs but creating 5,000 new ones in selected areas with strong business operations.
The telecommunications firm said the move was required to meet the target of saving at least one billion euros ($1.3 billion) in overhead costs by the end of 2015.
The company making hardware, software and infrastructure for fixed lines, mobile and Internet services has struggled to make a profit since the merger of France's Alcatel and Lucent from the US back in 2006. Last year, it posted a net loss of 1.37 billion euros, adding another 885 million euros in losses in the first half of the current year.
Alcatel-Lucent explained the planned job cuts would be carried out in Europe, the Middle East and Africa with over 4,000 employees to go, while 3,800 jobs would be slashed in the Asia Pacific region and another 2,100 in the Americas.
It remained unclear for the time being to what extent the company's two major German locations in Stuttgart and Nuremberg would be affected.
The firm's share price rose by 1.5 percent in early trading on Tuesday, following a stock rally of 170 percent since the arrival of new Chief Executive Michel Combes in April of this year. The rise reflected investors' optimism about the long-term fortunes of the company, which had been facing strong competition from Sweden's Ericsson, Finland's Nokia and China's Huawei.
hg/ rc (Reuters, AFP, dpa)