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Contractors and managers hit in Alcatel-Lucent layoffs

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Recently-installed Alcatel-Lucent boss Ben Verwaayen has wasted little time in swinging the axe - today the firm said 1,000 managers and 5,000 contractors are for the chop.

The company-wide cost-cutting programme is planned to save €1bn per year in the next two years. The loss-making telecoms equipment maker said it will break even next year and be profitable in 2010.

Alcatel-Lucent has been losing billions since it was formed by a merger in 2006. The combined outfit has already shed 16,500 jobs in its struggle for profitability.

Verwaayen will also seek savings in Alcatel-Lucent's real estate, support functions and discretionary spending (so get those creative expenses claims in sharpish).

The Dutchman was hired as CEO in September. At BT he was credited as the father of a massive restructuring from 2002 that saw it deliver huge profits. He sacked lots of people there, too.

He said: "The new management team is committed to rapidly executing this new strategy and leveraging the new streamlined organization. We are focused on delivering results and restoring profitability."

The market responded to today's announcement by sending Alcatel-Lucent shares down more than 11 per cent at time of writing. Analysts had expected a more radical restructuring. ®

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