Freshly merged Alcatel-Lucent is stepping up job cuts to 12,500 after lurching into a fourth quarter loss and forecast a first-quarter sales dip as tough trading and uncertainties from the tie-up take their toll.
However, the French-American telecoms equipment provider said it expected full-year revenues to grow by at least 5 per cent, in line with the telecoms carrier market in which it operates.
The company has three offices in the Republic - two in Dublin and one in Cork - employing approximtely 260 staff. It is not yet known how the cuts will affect these operations.
A spokesman told ireland.com that the number of redundancies in each country will not be made known untill after consultations have been carried out with each employee group.
The increased cost cuts sent shares more than 3 per cent higher. The stock was up €2.07 at €10.37 euros earlier outperforming the technology index up 0.9 per cent.
Alcatel-Lucent, which issued a profit warning in January, made a net loss of €618 million in the three months to December 31st compared with a profit of €381 million a year earlier.
The deficit included restructuring and impairment charges of €577 million.
Workers at Alcatel-Lucent have called for a strike on Feb. 15 to protest against the job cuts which were previously expected to amount to 9,000.
The company declined to give details on the speed of the job cuts nor the regional breakdown.
"The cuts will be discussed at each level in each country with organisations representating employees at Alcatel-Lucent," Finance Director Jean-Pascal Beaufret said in a conference call with journalists.
Alcatel-Lucent said it now expected pre-tax savings to total 1.7 billion euros over three years, up from 1.4 billion euros previously.
The job cuts come after Canada's Nortel Networks, from which Alcatel acquired its UMTS mobile access business in 2006, said it would slash 2,900 jobs, or 8.5 per cent of its workforce over the next two years.
Alcatel-Lucent proposed a dividend of €0.16 euro a share for 2006, the same it paid for 2005 and for 2001.
The results are the first combined for the two groups since they started operating as a merged entity on December 1st. "These figures are disappointing indeed ... but the fourth quarter does not reflect the benefits of the tie-up between Alcatel and Lucent and the growth potential of our company today," Mr Beaufret said.
"We have suffered from tough trading conditions, namely in North America as many of our clients there are consolidating..., so when they merge they delay certain investments."
He added that the company had also suffered from a period of uncertainty created by the tie-up as clients did not know on which products they could rely in the future and the companies' teams had also been focused on the reorganisation. Alcatel-Lucent declined to say by how much it expected revenues to decline in the first quarter.