Ottawa braces for impact of expanded Alcatel job cuts

OTTAWA (OBJ) — Telecommunications equipment maker Alcatel-Lucent is widening job cuts by 39 per cent to 12,500 to save 1.7 billion euros (US$2.2 billion) after a “challenging” fourth quarter.

The company declined to say how its Canadian operations headquartered in Ottawa would be affected, but local sources estimate that the number could be as high as 10 per cent of Ottawa staff, or 180 to 200 workers.

“We have no information on that level about the headcount,” said Alcatel-Lucent spokesperson Mary Ward. “We’ll be doing what makes sense for the business without impacting clients.”

The job cuts amount to 16 per cent of the global workforce, and is an increase from its original plan to lay off 9,000 workers after the $11.6-billion merger between Alcatel and Lucent last year.

Alcatel-Lucent posted fourth-quarter net losses of 618 million euros, compared to a profit of 381 million euros in the same period the year before. Pro-forma sales, which assume the merger took place at the start of 2006, fell 16 per cent to 4.42 billion euros from 5.25 billion euros in the fourth quarter of 2005.

The company expects 2007 sales growth to be at least five per cent, although it noted that first-quarter sales would probably drop from the previous year.

Last week, Nortel also announced more job cuts — 2,900 positions worldwide and the outsourcing of 1,000 positions to lower-cost locations, including an undisclosed number of positions at its Ottawa location. Sources estimate that around 500 jobs could be shed from Nortel’s local operations.

“It’s coming, but we don’t know when,” said Ottawa Talent Initiative executive director Gary Davis about the job cuts at both companies. “It’s a nervous time, with everybody looking at everybody else and wondering ‘is it going to be me? Is it going to be you?'”

Davis said the threat of layoffs means that OTI will be ramping up efforts to help match laid-off workers with new jobs.

“We’re getting geared up to deal with these people while their skills are still current,” he said. “And we’re hoping to connect with people sooner rather than later.”

— Ottawa Business Journal

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