Chief Executive Patricia Russo

The Franco-US telecommunications equipment manufacturer Alcatel-Lucent announced today that it will shed 12,500 jobs or 16 percent of staff, following a fall in its first quarter sales.

However, following difficulties arising from the 2006 merger of French firm Alcatel and US company Lucent that was spun off from AT&T (The US Bell Network) in the 1980's, the newly combined business forecasts full-year revenue growth by at least 5 percent.

"We expect that we will resume growth after a challenging first quarter...as short-term uncertainties and distractions from the merger are mitigated," Chief Executive Patricia Russo said in a conference call with analysts.

Alcatel-Lucent, which issued a profit warning last month, kept its annual dividend unchanged, reassuring those investors who feared the restructuring would impact its liquidity.

Workers at Alcatel-Lucent have called for a strike due to start next week to protest against the job cuts which were previously expected to amount to 9,000, or 11 percent of staff.

"The cuts will be discussed at each level in each country with organizations representing employees at Alcatel-Lucent," Finance Director Jean-Pascal Beaufret said in a conference call.

Alcatel-Lucent said today that it expected pre-tax savings of €1.7 billion over three years, up from €1.4 billion previously.

It said a substantial majority of the savings would be achieved in the first two years and 55 percent would be headcount related.

Net profit last year, calculated on a basis comparable to that in 2005, was €522m, from €1.67  billion in 2005.

Ireland

Alcatel was part of the consortium that won the major contract to modernise the Irish telephone system network from the Government of Charles Haughey in 1980.

Alcatel opened a factory near Bandon, County Cork and had a payroll of up to 400, at one stage.

Lucent, which reported one of the biggest losses on record during the tech meltdown, also had pre-merger operations in Ireland.

The company employs about 260 full time employees, and 130 contract workers in Dublin. A spokesperson said that a process consultation with staff will begin next week to continue for 90 days. The firm also employs 20 people in Cork.