Alcatel-Lucent broke the news Tuesday it will be laying off 10,000 employees worldwide by year-end 2015.
The mass staff reduction is one component of the "shift plan" outlined to investors and customers in June by CEO Michel Combes.
Combes' plan is a step-by-step process by which the company will cut costs, shift its focus to IP networking and amp up its channel sales. The plan spelled out Alcatel-Lucent's intention to generate $1.3 billion by selling off unspecified assets and save an additional $1.3 billion by slimming down its workforce.
Four months after the original announcement, the Paris-based company is going forward with at least a portion of that plan and laying off 10,000 employees spread out across Europe, the Middle East and Africa, Asia-Pacific and the Americas. The Americas will see the fewest hits, with 2,100 jobs being eliminated, almost half as many as Europe.
"We launched the Shift Plan in June to give Alcatel-Lucent an industrially sustainable future," 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 company specified a large portion of the layoffs will occur in areas of support, administration and sales.
In regard to Alcatel-Lucent's aim to push more sales through the channel, Les Spielman, CEO of Hospitality Automation Consultants, Valley Village, Calif., said the opportunity is there for the company to "get out there and see what the customer really wants."
Understanding that, he said, is one advantage of experiencing the customer through a channel perspective.
Alcatel-Lucent said in the statement that the layoffs were a necessary part of the plan's overall aim "to restore profitability to the company" and "[reallocate] resources to focus on future technologies while making a significant reduction of fixed funds."
Overall, Combes' effort in enforcing the shift plan is geared toward reshaping the company and making it a relevant competitor in the IP networking and ultra-broadband access marketplace.
PUBLISHED OCT. 8, 2013