The Paris, France-based networking equipment supplier will be organized around fixed communications, which accounts for about 40% of revenue and mobile and private communications, which each contribute roughly 30% of sales.
In the spin with which management feel obliged to surround such operations, Alcatel says that it is repositioning its organization for growth. The reality is that Alcatel is cutting more than a quarter of its workforce and around 23,000 employees will lose their jobs to get the workforce down to 60,000 by the end of 2003.
CEO Serge Tchuruk said that implementation of the new organization was an opportunity to ensure greater efficiency in the execution of the restructuring plan.
The reorganization will also make it easier for Alcatel to trade assets if it takes part in the restructuring of a sector crying out for consolidation as a result of the huge market slump. Fixed communications remains its core business and it has been able to profit from the growth of demand for broadband.
In mobile communications it is much weaker and the operation would benefit from a merger with another operator. The private communications sector, which serves markets such as enterprises, space and large institutions, could also be part of a future merger. Last week, Alactel warned that a preliminary evaluation of 2003 market prospects confirms the likelihood of a further deterioration from 2002 levels.
Source: Computerwire
