
“It is clear from the deteriorating macro environment and the competitive pricing environment in certain regions challenging profitability that we must embark on a more aggressive transformation,” said Alcatel CEO Ben Verwaayen. The company plans 750 million euros ($908 million) in new cost-cuts by the end of 2013, including the elimination of 5,000 jobs.
Alcatel is France’s largest phone-equipment supplier. It was created by the 2006 merger of Alcatel SA and Lucent Technologies Inc. Nearly one-third of its revenue derives from Europe. There it has faced reduced spending budgets by the region’s largest service providers, as well as lower-cost competition from Asian vendors like Huawei Technology.
Shares are were flat Wednesday and ended at $1.06, in a 52-week trading range of $1.04 t0 $4.97. Shares were down sharply Thursday morning in European trading. Thomson Reuters had a consensus analyst price target of $1.98 before this news.