Telecom Ramblings

Today, Alcatel-Lucent (NYSE:ALU - chart, news, filings) announced they would cut another 1000 jobs plus an additional 5000 contractors in an effort to save just under $1B in operating costs.  According to some this will be done through attrition rather than layoffs, but it’s somewhat hard to see in this economy.  Less jobs available, more people applying to them, everyone’s savings in the toilet, and the company already in the midst of a downsizing plan covering over 15,000 jobs?  Something tells me that natural attrition isn’t going to help much and most of those jobs will come via layoffs.

The response in European trading has been rather negative, with investors apparently disappointed that nothing more dramatic was going to happen.

“It looks like more restructuring but not the substantial change in the business model” that investors were hoping for, [Roland] Pitz said.

Yikes, be careful what you wish for. Faced with a recession, cutbacks in carrier spending, and a credit market from hell, do investors really want Alcatel to go out and take some nice big risks?  Seriously?  Nah, I figure they’re just disappointed to find out that the viable options available to the company just aren’t that numerous in this environment.  It doesn’t matter much what equipment you sell right now, they just aren’t buying as much of it.