More Job Cuts, Dropping Financials Continue At Alcatel-Lucent

The financial and workforce meltdown at Alcatel-Lucent continued as the firm Friday reported new job cuts of 3,500 and a net loss of 618 million ($805.8 million) for its fourth quarter ending December 31.

The company's separate operations in the year earlier period had reported a profit of 381 million ($495 million). Earlier Alcatel-Lucent said it would trim its workforce by 9,000 positions and the new trimming will bring the cutback number to 12,500. Alcatel-Lucent's total headcount will be lowered to less than 70,000 by the new positions to be cut.

Sales also suffered with adjusted pro-forma revenue dropping 16% to 4.42 billion ($5.74 billion) from 5.25 billion ($6.82 billion). The financial results were the first since the two firms formally merged last November.

Chief Executive Patricia Russo called the results "clearly disappointing," but she predicted the company would return to profitability later this year. Short-term uncertainty was cited as the chief reason for the profit decline. The company had warned of difficulties last month. so Friday's report wasn't entirely unexpected.

"The results for the fourth quarter were impacted by a combination of short-term uncertainty for both our customers and our people, as well as challenging market conditions, particularly in North America," Russo said in a statement. Alcatel-Lucent said it will focus in the future on wireless and optical broadband infrastructure products as well as 3G mobile networks and optical products.

The newly-announced job cuts are likely to exacerbate Alcatel-Lucent's already strained labor relations. The firm's French labor unions have called for a brief demonstration strike later this month.