Boston, MA 10/11/2013 (wallstreetpr) – The days ahead for Alcatel Lucent SA (ADR) (NYSE:ALU) is expected to be bumpy as the French-based company is still struggling to keep itself ashore amid its hurting revenues.Troubles are not new to Alcatel as the company has been badly performing since its merger with Lucent in 2006. The expectations set forth with the merger went bitter as the price cut and increased competition eroded the collaboration advantage of reduced labour and research and development costs.
The global communications company reported a $1.2 billion loss in its second quarter results. This led the CEO of the company to undergo a reorganization process which included steps like to reduce costs up to $1.36 billion by 2015 and shifting focus on next-generation technologies.
To align itself with the spelled out restructuring plans, the company has decided to cut down its worldwide workforce of around 72,000 full time employees by 10,000 and to further size down its business hubs by a half. The workforce cuts are planned in the markets of Europe, the Middle East and Africa by 4,100, 2,100 in the Americas; and the rest 3,800 in its Asia-Pacific markets. For these measures, Alcatel is already facing opposition from European politicians coupled with a push from French Prime Minister to rethink over its workforce reduction plan.
Also, the company wants to shift its attention on Gen-next technologies so that it can systematically move away from information technology and communications segments. The emphasis will be prioritized to the fields ofIP networking, cloud computing and broadband access technologies and services. The company also plans to reallocate its research and development expenditures towards these these technologies. However, Alcatel has tough competition in the sectors and future will unfold the effectiveness of the makeshift changes that the CEO has proposed.
On Thursday trade, Alcatel stock prices moved to $3.69 from its earlier price of $3.51.
