London, UK : French telecomms equipment maker Alcatel is set to cut a further 10 000 jobs worldwide. The company also admitted it would not make a profit this year, as it forecast just two months ago.
Alcatel already planned to reduce its global workforce by 23 000 by the end of 2002, including R&D staff, but said it sees no signs of an upturn in spending by the main telecomms carriers. In April the company said it would finish 2002 in the black.
The move is the latest blow to the battered telecomms business, and sends a clear signal that the downturn could stretch into 2003 and beyond. The news came on the back of WorldCom's announcement that it mis-stated its earnings over the past 15 months by more than $3bn.
Alcatel said "a further deterioration in market conditions seen in recent weeks" was the reason it had to act fast to stem losses and speed up its cost cutting plans. The company says it no longer expects a second half recovery as it issued a profit warning.
The latest job cuts will reduce the global workforce to 70 000 by the end of 2003. Last year, the company employed over 99 000, but has since closed numerous plants, outsourced a significant volume of production, and cut back on R&D staff.
Alcatel said it set aside £776m (nearly $1.18bn) for restructuring charges this year, although it still expects to reduce its overall net debt by the year-end thanks to ongoing reductions in its cost base.