Alcatel-Lucent to cut 5,000 more jobs after Q2 loss

Alcatel-Lucent announced plans to cut 5,000 jobs worldwide and withdraw from unprofitable markets and contracts, in the face of difficult economic conditions and competitive price pressures. The new 'Performance Program' aims to double cost reductions from the existing restructuring plan to a total EUR 1.25 billion by the end of next year. The company said it plans to end or restructure certain unprofitable managed services contracts and exit unprofitable countries, while it will also start managing its patent portfolio as an independent profit centre. 

The announcement came alongside second-quarter results showing a net loss of EUR 254 million for the three months. Revenues fell 7.1 percent from a year earlier to EUR 3.545 billion, and the operating result was a loss of EUR 31 million or 0.9 percent of sales. The main Networks division posted a 16.4 percent fall in sales excluding currency effects, hurt mainly by delayed spending by operators on mobile 2G/3G and optical equipment. 

The company did not give a full-year outlook, after earlier forecasting a higher operating margin in 2012. However, it does expect a "better" adjusted operating margin in the second half than the first and to have a "strong", positive net cash position at year-end. Operating cash flow in the first half was a negative EUR 184 million, and net cash totaled EUR 236 million at the end of June.  The company said it does not expect to make additional contributions to its US pension funds until at least 2016.