Alcatel, Siemens continue cost-cutting efforts

Alcatel SA and Siemens AG, two of Europe's biggest manufacturers of telecommunication equipment, continue to axe jobs to lower operating costs amidst a downturn in the communications sector.

Siemens will cut almost 700 jobs at its German production facilities in Greifswald and Bruchsal, which manufacture ISDN (Integrated Services Digital Network) and DSL (digital subscriber line) equipment, a company spokesman said on Wednesday.

"We are responding to weak market demand with these job cuts," he said.

In April, the Munich supplier said it would cut 6,500 jobs in its networking division by the end of next year. Also on Wednesday, Alcatel announced plans to step up its restructuring efforts to the tune of €1.2 billion (US$1.18 billion) this year. "Job cuts will certainly be part of the group's restructuring," a company spokesman said. He declined to provide details.

Over the past year, the Paris equipment manufacturer has slashed over 30,000 jobs and closed down plants.

In a conference call, Chief Financial Officer Jean-Pascal Beaufret said the measures are needed for equipment suppliers to continue operating in the tough economic environment.

Alcatel also said it expects second-quarter sales to be unchanged from the first quarter, compared with a hike in demand projected earlier by the company.

The Alcatel spokesman declined to comment on media reports that the company expects to post a loss in 2002, after previously forecasting an operating profit for the year.

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