Huge Layoffs at Alcatel-Lucent?

French-based telecom supplier Alcatel-Lucent stopped
short of denying a report the company may layoff as many as 20,000
employees, a dramatic increase of the around 9,000 previously planned.

“We’re not going to comment on speculation,” spokesperson Mary Ward
told Ward said the company will provide an update of its integration plans and earnings for 2006 this Friday.

French weekly L’Expansion reported today Alcatel-Lucent will
cut between 15,000 and 20,000 workers. Alcatel-Lucent said in January
it would take “additional actions” to further reduce costs.

The telecom equipment company last month said it expected flat
in 2006 due to increased competition and last year’s $13.4
billion merger between Alcatel and U.S.-based Lucent Technologies.

Revenue for 2006 was expected to near $23.7 billion, down slightly
from $24.1 billion during fiscal 2005. Likewise, the $1.3 billion profit expected for 2006 is lower than the $1.8 billion posted for all of 2005. The company predicted growth this year in the mid single
digits and said it expect to save $774 million in cost-cutting measures.

Alcatel-Lucent CEO Patricia Russo in January termed the final quarter
of 2006 “challenging,” prompted by a spending shift by large North
American customers and greater wireless competition globally.

The company lost more than eight percent following last month’s
earnings projections. , Alcatel-Lucent shares rose more than one percent to $12.99 in after hours trading Tuesday.

At last week’s DEMO conference, Alcatel-Lucent previewed “Project Evros” technology developed at Bell Labs. Evros is a wireless security platform for notebooks that includes a 3G PCMCIA card equipped with its own battery and processor running Linux. It’s due to ship later this year.

David Needle contributed to this article.

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