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Nokia to cut 1,200 Alcatel-Lucent jobs in France

Jun 22,2020 - Last updated at Jun 22,2020

A combo of file photos shows the logos of Finland's telecommunition company Nokia (up) and of multinational telecommunication company Alcatel-Lucent (AFP photo)

PARIS (AFP) — Nokia plans to eliminate 1,233 jobs at its Alcatel-Lucent subsidiary in France, slashing its workforce in the country by a third as it grapples with intense competition in the telecoms equipment market amid the launch of 5G networks, the company and unions said on Monday.

It is the fourth round of layoffs at Alcatel-Lucent in the four years since the hardware manufacturer was bought by Nokia in 2016, and the biggest by far.

"It's a catastrophe," Bernard Tremulot of the CFDT labour union told AFP after a meeting where management unveiled the plan.

Nokia said the job cuts, mainly in research and support departments, were part of global cost-cutting efforts launched in late 2018, "in a market environment where pressure on costs remains very intense".

"Our goal is to increase operational efficiency, improve productivity and become more agile in terms of R&D, so we can reinforce our competitive positions and guarantee the group's long-term performance," it said in a statement.

The move comes after Nokia's CEO Rajeev Suri said in March that he would step down in September, having overseen the company's transformation into a network systems company after its mobile phone business was decimated by the rise of Apple and Samsung.

Nokia's attempts to break into the 5G equipment market have struggled in the face of fierce competition from Huawei and Ericsson.

Last year, it had its first net profit — 7 million euros ($7.8 million) — since 2015.

Nokia said the French job cuts would be made through voluntary departures or transfers of some employees to other sites.

But the French finance ministry said after the announcement that it would begin talks with Nokia, which must "improve very significantly" its plan.

A ministry official told AFP that it would make counter-proposals in order to show that France is an attractive country for industrial firms.

France is planning to auction off 5G frequencies in September ahead of a commercial rollout by telecom providers by the end of this year.

"Nokia will continue to be a major employer in France, with a solid base in terms of R&D, sales and services," Nokia France chief Thierry Boisnon said in the statement.

But unions denounced a "betrayal", noting that Suri vowed to protect French jobs when securing French approval of the merger in 2015, when Emmanuel Macron was finance minister in the Socialist government of president Francois Hollande.

"This fourth round of layoffs is a betrayal, not only for employees but also for the politicians. Everyone should feel betrayed," Tremulot said. 

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