Alcatel-Lucent unveils restructuring plan to cut costs

Alcatel-Lucent (Paris, France) has announced further restructuring plans as part of its effort to slash €1.25 billion ($1.6 billion) in costs by the end of 2013.

The Franco-American networks equipment manufacturer aims to strengthen its sales organization and reshape a number of corporate functions under the new proposals.

The company is to scrap the regional structure at its four major business units and run each one as a global unit. From January 2013, it will also cut the number of executive committee members from 12 to six.

Alcatel-Lucent (Paris, France) has announced further restructuring plans as part of its effort to slash €1.25 billion ($1.6 billion) in costs by the end of 2013.

The Franco-American networks equipment manufacturer aims to strengthen its sales organization and reshape a number of corporate functions under the new proposals.

The company is to scrap the regional structure at its four major business units and run each one as a global unit. From January 2013, it will also cut the number of executive committee members from 12 to six.

The manufacturer has recently announced plans to cut 5,000 jobs from its payroll, saying it will provide more details on these cuts by the end of this month.

Paul Tufano, Alcatel-Lucent’s chief financial officer, is to add the role of chief operating officer to his current responsibilities, with oversight of the company’s supply chain and procurement as well as its enterprise, strategic industries and submarine businesses.

The major core networks, fixed networks, wireless and platforms divisions will be managed as part of a new global networks and platforms business group, led by Philippe Keryer, who was previously in charge of the networks business.

In addition, Robert Vrij, previously head of the Americas region, will become president of global sales and marketing, while Stephen Carter, who used to lead European marketing and communications, will oversee the cost-cutting program and take charge of the managed services unit.

Alcatel-Lucent faces a tough operating environment as operators in Europe cut their spending on network equipment.

In late July, it reported a net loss of €254 million.

Rival manufacturers including China’s Huawei (Shenzhen, China) and ZTE (Shenzhen, China) have also been affected by the European slump, while Nokia Siemens Networks (Helsinki, Finland) has already unveiled plans to cut its headcount by a quarter, sell off a number of business divisions and concentrate on mobile broadband products and services in future.