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?
Cutting jobs for out-dated / legacy systems (Score:3, Insightful)
Good Job! Sorry if anyone here was affected.
Legacy/OutDated != waste (Score:5, Insightful)
For companies with a "well-established" product line, legacy systems are often essentially "free money", especially for telco equipment with embarrassingly long lifetimes.
Re: (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 inve
No, new gear is not more profitable (Score:2)
Maintenance charges are pure gold. Old gear for which development costs were paid off decades ago is pure profit. It has essentially zero R&D expense, and continuing maintenance, licensing, and often leasing charges are associated with relatively little actual expense.
All companies that want to continue on indefinitely as a going concern need new product to sell, of course. But that doesn't mean the stuff they sold a long time ago isn't "The Gift That Keeps On Giving."
drop support, get crossed off the bid list (Score:2)
that's how it works. much of the time, the service contracts are lagniappe for the manufacturers in every field. there are also a tangle of legal service requirements that mean long after a provider wants to dump a bunch of power-sucking light-blinking money hogs, they have to maintain it because it is tariffed and posted for resale.
wireline companies would probably like to blow the central offices out and go VoIP all the way, and the technology is now mature for everything except 911 location information
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Looks like they're dropping dead waste, and putting more money into R&D.
Good Job! Sorry if anyone here was affected.
I can't tell if you are sarcastic or not? Most companies I know treat R&d like temps and keep the corporate jets they use once a year instead.
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...keep the corporate jets they use once a year instead.
If you think executives only play golf in exotic locations once a year, you are mistaken.
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Well customers do not pay them to play golf or eat caviar in jets. They pay for products that R&D need to design and make. But the lifestyle is more important than long term value for the shareholders these days.
Yes, I am cynical towards upper management as many of us have seen it all and these guys have golden parachutes so when competitors deliver the death knell they saw the writting in the previous quarter and already jumped off to the next company for an even higher salary.
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I share your cynicism. My post was supposed to be a joke that they play golf more than once a year, not an endorsement of private jets.
hey, pard, telco infrastructure lasts forever (Score:2)
the requirements of the FCC for durability and failover practically keep equipment operable for longer than 15 to 20 years in the backbone. all you need to do is replace the failures, periodically upgrade the software to clear bugs and enable new services, and for that you need infrastructure partners in it for the long haul. they get paid millions of bucks a year for service contracts.
a company that does not play by those rules gets crossed off the bid list. a customer that does not renew the service co
Pay for nothing (Score:5, Insightful)
Big corporation reduce workforce to increase profit. At some point they will produce everything for cheap using abroad subcontractors. That means a lot of money goes straight to shareholders without having any chance to go in workers' pockets. And since workers are also consumers, this badly impact the economy
At some point we will need to find a way to tax the profit and reinject money in consumer's pockets so that they can purchase the goods produced.
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Big corporation reduce workforce to increase profit. At some point they will produce everything for cheap using abroad subcontractors. That means a lot of money goes straight to shareholders without having any chance to go in workers' pockets. And since workers are also consumers, this badly impact the economy
The subcontractors have workers too. It just means the labor part of an economy will move to healthier places. And the workers out of a job? They can find new work.
Also, this apparent benefit to owning capital indicates to me that maybe some developed world people should think about getting some capital as a buffer against possibly getting less for their labor.
At some point we will need to find a way to tax the profit and reinject money in consumer's pockets so that they can purchase the goods produced.
Ah yes, the gerbil exercise wheel theory of economic activity being the sole reason for having an economy or perhaps even a society.
Simple question (Score:2)
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who fucking cares about apple why is apple always brought up as ac omparison to everything, they're not the shinning light of hope you think they are
fucking sheeple here recently
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In other words. Money isn't what you think it is either.
And US money is special among others, as it is a reserve money: every bank in the world want to purchase dollars, which is why US has to print dollars like crazy. As you noted, that oddly leave little money for US real economy.
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The weird thing is we probably should just print money.
Why? You get inflation and as a result no one is actually any better off except fixed rate borrowers and the money printers.
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The subcontractors have workers too.
But you know how it works. Big corporation will outsource wherever in the world labor is cheapest. When workers attempt to get raises, factories get moved to poorer countries
And the workers out of a job? They can find new work.
If there are jobs available... when workers are to poor to buy goods, the trend is to cut more jobs because there is no outlet for worker's production.
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But you know how it works. Big corporation will outsource wherever in the world labor is cheapest. When workers attempt to get raises, factories get moved to poorer countries
They're running out of choices. For example, there isn't another China with its massive industrial base to chose from. There are only so many people in the world. Any race to the bottom eventually finds that bottom.
If there are jobs available...
There are billions of jobs available. But only certain regions are trying to get those jobs.
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Any race to the bottom eventually finds that bottom.
We have to think about what bottom we can accept. Do we accept child labour? It already happens, sometimes. Will we accept Slavery?
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We have to think about what bottom we can accept.
No, I think we in the developed world have to accept that our labor isn't as competitive as it used to be. Lower wages, benefits, and social program levels (particularly, lower minimum wages, pullback of laws regulating the number of hours one can work in a week, and cutting back on public pensions) are a consequence of that.
I don't see slavery as the "bottom" since even countries like China and India are well beyond that. But what's the draw for labor in the most expensive markets of the world? Not ever
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No, I think we in the developed world have to accept that our labor isn't as competitive as it used to be.
You have a bias here, you consider competition is some kind of natural law that we cannot spare. But we made tribes, societies and nations to promote cooperation within boundaries, instead of competition.
Globalization destroys the boundaries, removing huge chunks of political decisions outside of People sovereignty. Once the rule is competition, cooperative behaviors such as social welfare get impossible to enforce.
But while People sovereignty has been neutralized, it can still be reactivated. People can ch
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You have a bias here, you consider competition is some kind of natural law that we cannot spare.
Sure, you can spare it. You'll just reap a lot of unpleasant unintended consequences when you neglect competition.
But while People sovereignty has been neutralized, it can still be reactivated.
It hasn't been neutralized. But we need to keep in mind that the global labor force has expanded several fold in the last half century. Increase in supply of labor means a decrease in price of labor. This can be and is to a degree countered by a substantial increase in the demand for labor (via business creation and expansion), but that's an avenue where the developed world has been notably self
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You'll just reap a lot of unpleasant unintended consequences when you neglect competition.
Just like you reap a lot of unpleasant unintended consequences when you neglect cooperation. A healthy economy is just a matter of equilibrium.
But we need to keep in mind that the global labor force has expanded several fold in the last half century. Increase in supply of labor means a decrease in price of labor.
Very true, and at the same time, worker productivity has increased, which means they produce more wealth. At the end of the road is an oversupply crisis. This leads us back to my initial post: we will need a way to pay people for nothing.
[unpaid children at school] producing educated, productive members of society. And if they really were producing nothing of value, then why do we have them in schools?
Because children are the school's product, not the school's workers. The teachers are the school's workers. And they are paid for t
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Very true, and at the same time, worker productivity has increased, which means they produce more wealth. At the end of the road is an oversupply crisis. This leads us back to my initial post: we will need a way to pay people for nothing.
If we looking at what actually is going on, we see 1) considerable increase in labor productivity (which is predicted by your claim), 2) a vast increase in the number of people employed (which isn't really predicted by your claim), and 3) a substantial rise in mean/median wages globally (which runs counter to your claim). Given that we aren't heading to this "end of the road", what is the point of making that claim?
Instead, I see no reason to pay people for nothing.
Because children are the school's product
No they aren't. The school doesn't make
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If we looking at what actually is going on, we see 1) considerable increase in labor productivity (which is predicted by your claim), 2) a vast increase in the number of people employed (which isn't really predicted by your claim), and 3) a substantial rise in mean/median wages globally (which runs counter to your claim).
I agree on point 1.
Point 2 is more difficult to sort, as we have first to tell if we talk globally or in first world countries. And do we talk about the last years or the last decades? I guess we can say that there are indeed more people available to work, since population increased, but are there more people employed? If you think about third world countries, you have to realize that the myriad of industrial workers we have know were agricultural workers before.
On point 3 I am sure it is wrong because you
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Point 2 is more difficult to sort, as we have first to tell if we talk globally or in first world countries.
Globally, of course. Those first world countries aren't isolated from the rest of the world.
And do we talk about the last years or the last decades?
How about since 1300 [berkeley.edu]? That long enough for you?
On point 3 I am sure it is wrong because you look as absolute value of wages without taking inflation into account: if we consider the percentage of GDP that goes to workers in first world countries, it has only lowered in the last decades.
That's because once again, first world labor is competing unsuccessfully with developing world labor. If one looks at it globally, you see a global increase in wages.
It's foolish to extrapolate from the developed world and its self-inflicted labor inefficiencies and obstacles to some productivity oversupply crisis. We wouldn't make similar claims for some failing busi
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Globally, of course. Those first world countries aren't isolated from the rest of the world.
Here again you are biased toward competition. Competition is enforced by globalization. Globalization is a political choice, not a law of nature. If People want to have cooperation (e.g.: social welfare), they need some boundaries in which competition leaves room for cooperation.
How about since 1300 [berkeley.edu]? That long enough for you?
GDP grows faster than population, that is excellent news. But how does it tells us about how many people are employed? This was your point, IIRC
If one looks at it globally, you see a global increase in wages.
Wait, wait, wait. Growing GDP per capita does not means growing wages. You have to find
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Here again you are biased toward competition. Competition is enforced by globalization. Globalization is a political choice, not a law of nature. If People want to have cooperation (e.g.: social welfare), they need some boundaries in which competition leaves room for cooperation.
What are the alternatives here? I see you mention social welfare as an example of cooperation, but it fails in two ways - by creating tragedy of the commons situations (with the usual inept fixes for them) and zero sum games (social welfare is usually created by impairing others either via regulation or the seizure of resources).
Second, I find it interesting that you are advocating protectionism in order to protect a fragile system. Competitive systems are naturally robust. Your social welfare system is
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In a capitalist environment, over time there should be LESS people employed as we find efficiencies.
No, that is a non sequitur. It doesn't follow from capitalist environments that demand for labor should decline. After all, if there's a lot of unemployed people, then you could just start a business and get cheap, high productivity labor. You're leaving money on the ground by not doing that.
And if we look at actual capitalism environments, we see growing demand for labor contrary to your premise.
So initial premise is wrong. Thus, the rest of your post becomes irrelevant.
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[social welfare] fails in two ways - by creating tragedy of the commons situations (with the usual inept fixes for them) and zero sum games (social welfare is usually created by impairing others either via regulation or the seizure of resources).
The tragedy of commons will need more explanations. And if the game is indeed zero-sum GDP-wise, it is just because its benefits are not taken into account by GDP. Just one example: having a sick population will degrade workers performances.
Second, I find it interesting that you are advocating protectionism in order to protect a fragile system. Competitive systems are naturally robust.
You chose the right word: naturally. Building cooperating societies runs against natural laws of competition, and this is what humanity has been doing successfully for millions of years. Yes, human being are social animals. Are you going to tell otherwise? Competition is
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The tragedy of commons will need more explanations.
A lot of social welfare is the creation of cheap public goods (for example, farm subsidies or overly cheap flood insurance). These typically get abused unless there is a strong barrier to consumption, which usually includes monitoring of potential recipients and regulation of their behavior and activities.
And if the game is indeed zero-sum GDP-wise
My view is that social welfare collectively is a net loss GDP-wise. As I mentioned in my previous post, most social welfare boils down to taking something from one party and giving to another. That creates
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A lot of social welfare is the creation of cheap public goods (for example, farm subsidies or overly cheap flood insurance). These typically get abused unless there is a strong barrier to consumption, which usually includes monitoring of potential recipients and regulation of their behavior and activities.
Odd examples. I was more referring to what western European countries have been doing with success since 1945, and which is getting more and more impossible to run in a globalized context: public health insurance, public unemployment insurance, public retirement pensions. Where are the tragedy of commons there?
My view is that social welfare collectively is a net loss GDP-wise.
You are right, but as I explained, GDP does not measure everything. It does not measure people happiness, nor does it take into account externalities. A sick worker is less productive, and socialized
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Odd examples. I was more referring to what western European countries have been doing with success since 1945, and which is getting more and more impossible to run in a globalized context: public health insurance, public unemployment insurance, public retirement pensions. Where are the tragedy of commons there?
Fraud is an example of overconsumption of these public goods. There's also the common matter of not having enough young workers to support the elderly pensioners. When one couples that with another common overconsumption problem of pensions, promising more than has been put into the pension, you can get shaky pension systems with any funds being drained by the pensioners dependent on the system.
Please prove me wrong. Please show me that percentage of per-capita GDP that goes to wages globally increased since 1980.
I'm not going to, because that's the reverse of what would actually what would happen in a situation where supply
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Fraud is an example of overconsumption of these public goods.
What fraud? Do you have anything documented on pension fraud in western Europe? I am interested.
There's also the common matter of not having enough young workers to support the elderly pensioners
What is relevant is not the number of workers vs pensioners, but the wealth produced by the former and consumed by the later. And since workers productivity grows up, we need less and less workers to create the wealth needed by pensioners. The reason why it has trouble to sustain today is that workers wages do not follow GDP increase, and it even shrinks in percentage.
My claim of "tracking GDP" means a substantial increases in GDP correlate with substantial increases in wages
Numbers will tell that it is true, but at the
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What fraud? Do you have anything documented on pension fraud in western Europe? I am interested.
That's an awfully particular question. Perhaps you should do your own research rather than ask random people on Slashdot? I can speak of some US-side fraud such as corporations looting government-backed pensions or the ever popular dead people who never get off the rolls.
You extrapolate a lot from this study, the summary does not even include the word "wage".
Go to figure 2, "World distribution of income: 1970 and 2006". I figure "income" is a near synonym for "wages".
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That's an awfully particular question. Perhaps you should do your own research rather than ask random people on Slashdot?
Let me sum it up: I talk about social welfare, you say it does not work. I cite example of western Europe socialized insurance for health, unemployment and pensions, that has been working fine for 50 years, you say it does not work because of fraud. Since this is a recurrent FUD, I ask example, you tell me to find on my own.
I figure "income" is a near synonym for "wages".
Wage is payment for work form an employer to an employee. There are many forms of incomes that are not wages:
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I deal with ALU everyday and I say that their networking designs are finest 1990's era engineering I have ever seen. Multi-state spanning tree domains, Deathly fear of routing protocols, insanely expensive routers with crappy performance and odd limitations that are designed solely to sell insanely expensive cards. And that's just their tech, the level of bureaucracy and hate for co-existing with other vendors is astounding.
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Even before that effect kicks in, it isn't exactly rocket surgery for "cheap expendable subcontractors" to become "ODMs", then "Competitors", and finally "Eating your lunch".
Especially in markets that are heavily commodified, or heading in that direction (good thing switching and telco doesn't have a fuckton of seats concerned mostly by per-port cost or anything, Alcatel...) if you hire somebody else to have a 'core competence' in manufacturing, you end up having 'core competence' in little more than writin
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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 peopl
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The USA on the other hand has pretty much no welfare system, if you lose your job you are lucky to get a few weeks of unemployment benefits before you are tossed to the wolves.
26 weeks [wikipedia.org] is more than a few weeks. And there's a temporary extension currently in place which stretched that out to about 9-14 weeks [doleta.gov] of additional payments.
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If people don't have money, they cannot buy anything. Why can't the big corporations see this?
They do, but it's a tragedy of the commons because not every company has to support the workforce for them to profit.
Not so sorry I lost my Lucent interview (Score:2)
Bell Labs / Lucent recruited heavily from my school, it being one of the two nearest engineering schools to Lucent HQ. (We had Dennis Ritchie and Bjarne Stroustroup give lectures at ACM meetings, and we had several Lucent PHd's as adjunct faculty) Lucent had a minimum GPA requirement of 3.0 in order to obtain an interview. I had a 2.94, therefore being .01 short of rounding up to a 3.0. We are talking a single exam question in frosh calc here... I was very disappointed at the time.
I was substantially l
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I don't have the impression that people can simply slack off, here in Belgium.
Last I checked, Italy wasn't in Belgium. Unless you guys have been busy, I doubt he was talking about Belgium.
hope not (Score:2)
ALU is doing a lot of things right, from the customer standpoint. they have the usual and expected number of "butches" here and there, as all tech equipment that does anything more complicated than put "hello, world" up on the screen does.
the trick is, how to get rid of dead weight that costs a ton and does nothing.
way I see it, there are a lot of extra VPs, senior directors, and district/area/product/country presidents that should be holding "slow" signs at a road project, for the pay they are more worthy
Its Trickle Down Economics (Score:5, Insightful)
Screw the employee, pay the shareholders.
After they fire you they'll raid your savings and 401k, sink your mortgage under water, and let you go without viable medical options.
Profit for few at the expense of many. That the corporate way.
Time to eat the rich and banish k street.
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Let's have a look at ALU stock
https://www.google.com/finance?q=NYSE%3AALU [google.com]
Price: 2.51
EPS: -1.62
Now let pay attention to this thing called EARNINGS. This is a company losing money.
Do you expect it to act like the government and magically go into more debt and print money and tax other people to keep itself going and pay its employees?
By all means, let's lobby government to fund engineering jobs and bailout companies the same way we fund the public sector and other fields (healthcare, education...). Let's lobb
The problem is (Score:5, Informative)
And having administered quite a few at&t/Lucent PBX's like Definity and Prologix, I can tell you I've NEVER seen one fail. Some have been in place for the better part of three decades now and they are still going strong.
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The "big boys" only use A-L. Cisco, while decent, is enterprise grade. Carrier grade (think NEBS) is a whole different story, and is far more expensive.
A-L switches are different from Cisco in architecture. Very different. They are not meant for core work, but being able to handle tier 1 grade peering.
A-L still has a big market coming up. 10GigE is starting to go from the backbone to the internal parts of a fabric. A-L also would profit by the converged SAN/network switch trend with FCoE and iSCSI.
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Er, No.
The "big boys" are the IP networks, and have been for years, in practice there's two major vendors (Cisco & Juniper) and a bunch of also-rans that can play somewhat (ALU and Brocade [Foundry]).
ALU kit can run core & transmission, but it's not the top tier kit.
The "big boys" are also migrating wholesale to 100g links as their multi-terabit backbones get painful to manage with trunked 10g links.
When tech companies start being run by business... (Score:2)
Anytime a tech company starts being run by business types they tank. The business guys have no idea what really drives the company and inevitably see R&D as an unnecessary expense. HP went from a tech innovator to a company pimping branded products made in china and designed by monkeys.
It's only when you get that rare combination of technical AND business savvy that you get an Apple or HP in the first place.
This is not the way (Score:2)