Record Losses Mean Jobs to Go at Alcatel

Alcatel plans to axe another 10,000 jobs as the market for telecommunications equipment remains stagnant, the struggling French telecoms company announced today.

In the latest blow to the crisis-ridden telecoms sector, the company said it was no longer expecting steady sales in the second half, forecasting a decline of 10% from the first-half as cash-strapped telecoms operators keep a tight lid on spending.

Alcatel said in June it was going to cut its workforce from 83,000 at the end June to about 70,000 by the end of the year. The new target is now 60,000 and the losses would mean a charge of €500m (£316m), Alcatel said.

"Due to further deterioration of telecoms markets, Alcatel will present to employee representatives an amplification of its restructuring programme to maintain the previously announced goal of a profit restoration in 2003," Alcatel said.

The company employed 110,000 employees worldwide at the end of 2000. But like its competitors such as Nortel in Canada and Marconi in the UK, Alcatel has had to drastically reduce its workforce in the face of a collapse in demand for telecommunications equipment after the bursting of the hi-tech bubble two years ago.

The company, one of France's blue-chip names, was forced to issue a statement yesterday in response to its sliding share price, saying it had sufficient financing for 2003 and beyond.

Alcatel shares, down 88% since the start of the year, have dropped a third this week alone, knocking the group's market capitalisation to just €3bn.

Earlier in the week, Alcatel had said it planned to cut jobs at its plants in France and Scotland. But the firm said today no decision had yet been made on where the axe would fall. Alcatel, which employs 948 people at four sites in the UK at Greenwich, Banbury, Maidenhead and Newport, lost €5bn last year, a record French corporate loss.