The layoffs affect 14% of Alcatel-Lucent's global work force, including 4,100 positions in Europe, the Middle East and Africa, 3,800 in Asia Pacific and 2,100 in the Americas. By 2015, Alcatel-Lucent will have halved the number of global business hubs.
The job cuts are a key component to Alcatel-Lucent's "Shift Plan" to restructure and refocus R&D activities and reduce fixed costs. The moves will save 1 billion euros ($1.4 billion) by 2015, reducing fixed costs by more than 15%.
"To carry out this plan we must make difficult decisions and we will make them with open and transparent dialogue with our employees and their representatives," CEO Michel Combes said in a statement. "The Shift Plan is about the company regaining control of its destiny."
Alcatel-Lucent shares were 1.69% lower to $3.79 on Tuesday. The company is lagging the S&P 500, which is down 0.46%.
TheStreet Ratings team rates Alcatel-Lucent as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about its recommendation:
"We rate Alcatel-Lucent (ALU) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, generally high debt management risk, disappointing return on equity and feeble growth in its earnings per share."