OTTAWA (OBJ) — It may look like an everyday kind of story to North Americans, and especially Ottawa IT workers, but it seems that Alcatel-Lucent SA’s restructuring plans have Europe up in arms.
French unions held a two-hour strike late last week to protest Alcatel-Lucent’s decision to cut jobs in order to reduce costs. Unions said to expect more action in the future. Even France’s minister in charge of labour and youth, Gerard Larcher, met with Alcatel-Lucent employees and urged the company to find a “solution” for each worker laid off.
The Paris-based telecom equipment maker announced it would be cutting 1,468 French jobs within two years and not extending 320 temporary jobs. The cuts amount to less than 12 per cent of the company’s French workforce. One fifth of the 5,000 jobs in Germany will also be cut and a Belgian plant in Geel had been sold, the trade unions added.
Alcatel-Lucent announced earlier this month that it planned to cut 12,500 jobs, or 16 per cent of its global workforce, after it posted a fourth-quarter net loss equivalent to $256 million, compared to a profit of $581 million in the same period the year before.
Alcatel-Lucent began operating as a merged entity late last year following the bid by French company Alcatel SA for U.S. firm Lucent Technologies Inc. last April to create one of the largest telecommunications equipment makers in the world. The combined company had approximately 80,000 employees at the end of 2006, including about 5,000 in New Jersey and 21,500 across the U.S.
Before the announcement in France, the buzz around Alcatel’s Ottawa-based Canadian headquarters, where 2,000 employees work, was that the majority of job cuts would be in the North American market. However, Ottawa employees will have to wait for the axe to fall as the company has remained tight-lipped about where the rest of the cuts would take place.
“We’re not providing a split by region or country,” said Alcatel-Lucent spokesperson Mary Ward. “We are going to do what is best for the company.”
Gary Davis of the Ottawa Talent Initiative, an organization that works with high-tech workers looking for work, said that he has not heard anything about where the cuts will be.
“When things like this happen at the big places, an invisible wall goes up. I get the sense that even those handing out the notices are worried that they might be getting notices themselves,” he said.
Last March, more than one million people marched through French streets. Workers’ unions threatened a general strike after the government pushed through a law to reduce the nation’s double-digit youth unemployment. The law aimed to make it easier for companies to lay off workers under the age of 26 through reducing severance to two weeks’ notice after the first month and one month’s notice after six months for workers under 26. Because of the protests, the government ended up replacing the controversial bill with subsidies to encourage companies to take on unqualified young staff.
“We saw what happened last spring when they tried to change that law, and the government backed off. But if you have a company over here with ties to France, it’s easier to lay people off here,” said Davis. “It’s a totally different culture as to how work fits into people’s lives. I have a friend who works for an environmental agency in France and right away she got six-weeks holidays. When she works she works like hell, but there is lots of room for manoeuvring.”
Tyler Chamberlin teaches international business and high-tech management at the University of Ottawa. He said although Ottawa workers might be easier to lay off, France is at a disadvantage, not Canada, when it comes to labour laws.
“It’s a major challenge for them (in France). When volatility is high, and people are losing their jobs, it’s difficult for everyone, but that is the reality of the industry. It makes it that much more difficult to deal in these industries when you have labour market inflexibility,” said Chamberlin.
Chamberlin’s assessment of the situation is that the U.S. side of the merger, which included Lucent Technologies, has much more to worry about than the 2,000 workers in Ottawa.
–Ottawa Business Journal