Alcatel’s CEO has told its workforce that they will not suffer job cuts as the company cuts costs.
Alcatel’s CEO has made an effort to allay his workforce’s fears of forthcoming job cuts. At the Alcatel European Workers Council bi-annual meeting, Serge Tchuruk reiterated the company’s outsourcing policy. While the French firm is set to halve its 100-strong network of factories, according to Mr Tchuruk’s address this will not be done through closures but through farming out production.
The announcement comes as workers are still taking in Nokia’s announcement yesterday it is to cut its workforce and two days after Philips announced the loss of over 1000 French handset manufacturing positions. As the telecom industry boat fights its way through today’s choppy waters, Alcatel workers understandably expected that cost cuts amounted to job cuts.
According to Mr Tchuruk, Alcatel, which successfully outsourced its handset operations in Singapore recently, had already entered into talks with some possible buyers of the 41 factories the company is looking to rid itself of. So perhaps workers can trust their future to Mr Tchuruk when he says, we will not close sites, there is no employment problem, that is the reality. Certainly, the move will go some way towards appeasing France’s labor unions, who tend to make life difficult to say the least for companies who want to downsize.
But while Alcatel has been outsourcing for several years, cutting its number of plants from 200 in 1998 to today’s figure without axing jobs, the announcement seems slightly questionable. Ultimately, the demand for Alcatel’s kit has fallen, as have its profits. Unless the downturn ends rather sooner than most expect, the firm has no option but to cut production, unless it wants to end up with huge inventories of out-of-date stock.
As a result, the buyers of the outsourced plants will still be faced with falling orders. Barring feats of magic (or state aid), cutting jobs may well be the only option.
