"Everyone knows this plan is the last chance. The company is in a very serious situation," Michael Combes, Chief Executive Officer of Alcatel-Lucent, told Le Monde newspaper, according to Reuters. Combes is the third CEO since the company's merger.
Alcatel-Lucent's cost cutting plan is intended to save the company 1 billion euros by the end of 2015. To get there, Alcatel-Lucent plans to reallocate R&D investment to next-generation technologies, upping its investment from 65 percent to 85 percent; reduce R&D spending in legacy technologies by 60 percent; and reduce administrative, sales, and support functions.
"We launched The Shift Plan in June to give Alcatel-Lucent an industrially sustainable future. The strategic choices we made have been validated by our customers," Combes said in a statement. "To carry out this plan we must make difficult decisions and we will make them with open and transparent dialogue with our employees and their representatives. The Shift Plan is about the company regaining control of its destiny."
The job cuts will be spread out to the various geographic regions Alcatel-Lucent operates in. Around 4,100 reductions will take place in Europe, Middle East, and Africa, along with 3,800 in Asia Pacific and 2,100 in Americas, the company said. By the end of 2015, Alcatel-Lucent will have the cut the number of its business hubs in half.