Feeds

Merde! Alcatel posts massive loss

20,000 workers face la guillotine

  • alert
  • submit to reddit

High performance access to file storage

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

High performance access to file storage

More from The Register

next story
Seagate brings out 6TB HDD, did not need NO STEENKIN' SHINGLES
Or helium filling either, according to reports
European Court of Justice rips up Data Retention Directive
Rules 'interfering' measure to be 'invalid'
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Cisco reps flog Whiptail's Invicta arrays against EMC and Pure
Storage reseller report reveals who's selling what
Bored with trading oil and gold? Why not flog some CLOUD servers?
Chicago Mercantile Exchange plans cloud spot exchange
Just what could be inside Dropbox's new 'Home For Life'?
Biz apps, messaging, photos, email, more storage – sorry, did you think there would be cake?
IT bods: How long does it take YOU to train up on new tech?
I'll leave my arrays to do the hard work, if you don't mind
prev story

Whitepapers

Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
HP ArcSight ESM solution helps Finansbank
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.