In order to implement the proposed strategy for Alcatel-Lucent will pass through major strategic changes and take significant steps to restructure its operations. The company will focus on three major markets (service providers, businesses and some vertical markets) and in four key areas of investment, namely: IP, optics, mobile and fixed broadband networks and the means to implement applications.
Alcatel-Lucent will build partnerships, as well as participate in the consolidation of the industry to reduce the cost of WiMAX, CPE, the classic reference network, next generation fixed network (NGN) without the support of IMS and some traditional applications.
As the company intends to implement its plans in the context of the global financial crisis? Alcatel-Lucent will take some serious measures aimed at reducing break-even at 1 billion euros in 2009 and 2010. In implementing these initiatives, Alcatel-Lucent plans to reduce the number of managers by about 1000 and working under contract - about 5000 people. The company also will complete the existing initiatives to restructure and seek opportunities to reduce the cost of real estate and support functions, as well as discretionary spending. In general, Alcatel-Lucent predicts that by the fourth quarter of 2009, when extrapolating current rates overall savings of 750 million euros (excluding currency fluctuations), of which approximately one third - is the cost of sales and two-thirds - costs of R & D and SG & A.
Interestingly, in 2009 Alcatel-Lucent expects a drop in the telecommunications market and related services for the implementation of approximately 8-12% (excluding currency fluctuations); company also anticipates continued stability of market share. As a result of the expected decline in volumes and the fact that increased gross margins will occur only at the end of the year, the initial forecast the company for 2009 will be the achievement of adjusted operating profit at break-even point.