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Alcatel to shed 10,000 jobs
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October 31, 2001: 3:23 a.m. ET
French telecom equipment maker posts Q3 loss, expects red ink for full year
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LONDON (CNN) - Alcatel, Europe's fourth-largest telephone equipment maker, said on Wednesday it would cut 10,000 jobs as it posted third-quarter losses.
Alactel, like its rivals Ericsson and Lucent Technologies, has been hit hard by a sharp downturn in demand from telecom operators for wireless and internet technology as the global economy teeters on the brink of a possible recession.
"The industry is suffering from over supply," said Martin Heath, a telecoms analyst at KPMG Consulting. "Acatel and Cisco have geared themselves up for 60 percent to 80 percent revenue growth, when in fact they can expect to achieve 20 percent growth and many are having a problem with that target."
Alactel has already announced plans to axe 23,000 posts, taking the total to 33,000, or about a third of its workforce.
The French company posted a loss of  558 million ($506 million), or 49 cents a share in the three months to September 30, compared with profit of 297 million, or 25 cents, in the same period a year earlier.
Its operating loss was 215 million, versus profit of 619 million. Analysts polled by Reuters had expected an operating loss of 185 million and a net loss of 309 million.
Third-quarter sales fell to 5.6 billion from 6.8 billion a year earlier. Alcatel blamed the 18 percent drop on the "severe" U.S. downturn.
Paris-based Alcatel expects to post a fourth-quarter operating loss of about the same size and a full-year net loss of about 5 billion.
The company said 2001 sales would be "only a few percent off from 2000" and 2001 operating income would be "not that far off from breakeven." It plans the cost of restructuring it business and jobs losses to total 1.2 billion.
Alcatel stock, which has gained around 20 percent this month amid a pick-up in sentiment over telecoms, but shed around five percent on Tuesday was little changed at 15.70. 
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