Alcatel-Lucent Cuts Go Deeper — 7,500 Jobs Gone and Counting 78
Dawn Kawamoto writes "Alcatel-Lucent has cut 7,500 jobs since the start of the year — a couple thousand more than what employees of the embattled telecom equipment maker may have been expecting. Last summer, Alcatel-Lucent said it expected to cut over 5,000 jobs by the end of 2013. Well, cuts have gone deeper than that, and the company's newly minted CEO, Michel Combes, told Wall Street during the second quarter earnings call Tuesday to expect additional cuts and the related cost savings in the coming quarters."
Cost Savings?? (Score:4, Interesting)
"expect additional cuts and the related cost savings in the coming quarters"
What about the coming years? I'm not familiar with this particular situation but I've seen plenty of companies happy to give up everything in the long term for short term gains to satisfy Wall Street. Is that the case here?
Re:Legacy/OutDated != waste (Score:3, Interesting)
The telco gear makers would much rather that those telcos buy the new stuff as it's far more profitable. You're going to see companies like ALU and others in their space start to put the squeeze on these telcos that refuse to upgrade. The price of running your 30-40 year-old central office phone switch is going to go up.
The biggest challenge and disappointment in the telco market is that the telco companies have shown such little interest in upgrading their networks. There has been a lot of speculative investment in telco gear makers in the last 10 years or so on the basis that we would be seeing billions of dollars invested in upgrades that have not materialized. Now what we're seeing is the demise of companies like Nortel and radical changes happening at ALU and NSN to stay afloat.
Re:Pay for nothing (Score:3, Interesting)
This is the kind of thing that drives me quite crazy.
If a certain percentage of people don't have jobs, they cannot purchase goods or services. If the percentage gets too high, you either have a very severe recession or a revolution. This outcome is undesirable to exactly 100% of any population. (Think last possible resort before suicide...)
Either way, the economic damage this causes is immeasurable. Banks might be able to make some portion of profit even in a bad economy due to interest, but when people don't have enough money because they're all unemployed the service industry dies instantly and even the essential industries (food/fuel/clothing) see massive profit drops.
All that said - economics looks to be a zero sum game. If people don't have money, they cannot buy anything. Why can't the big corporations see this? Seems to me they're being penny-wise but pound-shy, and trading short term, immediate gains for future bankruptcy and economic collapse.