French Government Tells Alcatel to Rethink Job Cuts

The French Prime Minister said that the government wants to reduce the number of job losses in France, where Alcatel-Lucent said it would eliminate 900 jobs and replace another 900 employees through subcontracting arrangements or internal transfers. The government is asking the company to revise its plans, according to a report in The Wall Street Journal.

Firing people never has been easy (or cheap) in France, and a recently enacted law gives the government a role in approving job cuts at large companies like Alcatel-Lucent. The government last year delayed for months a layoff of more than 8,000 jobs at PSA Peugeot Citroën.

The most likely outcome of the planned Alcatel-Lucent job cuts is that restructuring costs will increase as the government and the unions force the company to pay more for the privilege of firing people.

Alcatel-Lucent shares opened up about 2% Wednesday morning, at $3.55 in a 52-week range of $0.91 to $4.02.