Alcatel-Lucent to cut over 5000 global jobs

Telecoms equipment maker Alcatel-Lucent plans to axe 5490 jobs worldwide as part of a cost-saving program unveiled in July.

More than a quarter of the cuts will be made in France. French union representatives on Thursday pledged to fight the 1430 job cuts and called on the government to intervene, creating another headache for the new Socialist government as it tries to tackle unemployment which is at a 13-year high.

"We are in shock," Isabelle Guillemot, of the CFDT union, said, calling on workers to hold protests on Friday.

The French company said in July that it would reduce its global headcount and find €1.3 billion ($A1.6 billion) in savings by the end of 2013 by exiting unprofitable markets and contracts. Chief executive Ben Verwaayen's long-awaited turnaround of the group has been delayed by competition from low-cost Chinese rivals and a slowdown in spending by global telecom operators.

"These are difficult decisions but are necessary for the long-term health and sustainable profitability of the company," a spokesman for the group said on Thursday.

Alcatel-Lucent shares closed up 8 percent, adding to a 7 percent bounce on Wednesday. Despite the two-day rally, the shares remain down about 60 percent since a peak in February, giving it a market value below €2 billion.

Alcatel-Lucent is also the most shorted stock on the French blue-chip CAC 40 index with 16 percent of outstanding shares out on loan, according to Markit data, a sign that many investors are betting on further share price declines.

The company, which employs 76,000 people worldwide, has said the job cuts will not affect the 26,000 staff working on research and development worldwide. The CFDT union said that the cuts would mainly hit support functions such as sales, marketing, finance and human resources.

Overall, the company plans to make 3000 job cuts in the Europe, Middle East and Africa region, with 990 in Asia-Pacific and 1200 in the Americas.

In France, the company will close the headquarters of its French unit now at Velizy, near Paris, and move the roughly 2400 staff to another office in Villarceaux, 100 kilometres southwest of the capital. A spokeswoman said the move was aimed at saving money while creating the group's second-largest R&D centre worldwide.

Alcatel-Lucent is grappling with high cash burn and lacks the scale of rivals Ericsson and Huawei. It issued a profit warning and posted a loss in the second quarter and is due to report third quarter results on November 2.

The group said last month that it would restructure to centralise procurement, sales and marketing and reshuffle its management as part of the cost-cutting plan.