Feeds

Merde! Alcatel posts massive loss

20,000 workers face la guillotine

  • alert
  • submit to reddit

Choosing a cloud hosting partner with confidence

Alcatel reported second quarter losses that saw it dropping into the red for the first time since 1995, continuing the run of bad results from major telecommunications equipment manufacturers.

The French firm recorded a loss of 3.1 billion euros ($2.73 billion) compared with second quarter net income of 344 million ($303 million) in the second quarter of 2000. Sales were up only slightly this quarter at 6.77 billion ($5.96 billion), compared to 6.46 billion ($5.68 billion) over the same period last year.

Alcatel said its was hit by weak ebusiness and handset sales but benefited from increased spending by telcos in mobile and broadband technology. A failed attempt by Alcatel to merge with Lucent (and a swollen inventory) didn't help matters much either.

To restructure its business, Alcatel plans to lay off 14,000 Alcatel employees and 4,000 contract workers this year. An additional 2,000 workers will change employers through outsourcing programs. The firm said that at the end of June it was 60 per cent through implementing this jobs cull, which it hopes will save it 1 billion euros ($880 million) this year.

As part of its restructuring, Alcatel plans to half the number of factories it operates in the UK and outsource much of its manufacturing.

Alcatel's chief executive Serge Tchuruk said he did not expect technology spending in the US to recover this year, and he said that the downturn in the tech economy may spread to Europe, and has already hit the UK.

Along with the earnings announcement cam news that Krish Prabhu, Alcatel's chief operating officer, said he was leaving the company in order to spend "more time with his family" in Dallas. He will continue to sit on Alcatel's board.

Separately, Foundry Networks reported results which show that at least the smaller players in the networking market are keeping their head above water, even if larger players are making losses and shedding staff. Foundry, which makes intelligent networking switches, reported second quarter net income of $8.3 million, down 67 per cent on the $ 23.9 million it recorded in the same period last year.

Foundry's sales fell back from $88.8 million in the second quarter of 2000, to $88.6 million this quarter. ®

External Links

2001 Second Quarter Results
Krish Prabhu resigns as Alcatel's chief operations officer
Foundry's results

Related Stories

Alcatel slashes 300 UK jobs
Alcatel to pink slip 2,500 US workers
Alcatel gets rid of ADSL modem business
Lucent jilts Alcatel at the Altar
Lucent to cut another 15,000 to 20,000 jobs

Top 5 reasons to deploy VMware with Tegile

More from The Register

next story
'Kim Kardashian snaps naked selfies with a BLACKBERRY'. *Twitterati gasps*
More alleged private, nude celeb pics appear online
Wanna keep your data for 1,000 YEARS? No? Hard luck, HDS wants you to anyway
Combine Blu-ray and M-DISC and you get this monster
US boffins demo 'twisted radio' mux
OAM takes wireless signals to 32 Gbps
Google+ GOING, GOING ... ? Newbie Gmailers no longer forced into mandatory ID slurp
Mountain View distances itself from lame 'network thingy'
EMC, HP blockbuster 'merger' shocker comes a cropper
Stand down, FTC... you can put your feet up for a bit
Apple flops out 2FA for iCloud in bid to stop future nude selfie leaks
Millions of 4chan users howl with laughter as Cupertino slams stable door
Students playing with impressive racks? Yes, it's cluster comp time
The most comprehensive coverage the world has ever seen. Ever
Run little spreadsheet, run! IBM's Watson is coming to gobble you up
Big Blue's big super's big appetite for big data in big clouds for big analytics
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.