Telecoms downturn forces Alcatel to cut 3,000 more jobs

Alcatel, the French telecoms equipment manufacturer, yesterday made redundant more than half its 1,100 staff in Greenwich, south-east London, as part of over 3,000 job cuts in the UK, France and the US.

The redundancies, which follow Alcatel's elimination of more than 20,000 jobs earlier this year, are targeted on its optical fibre and undersea network businesses. The plant in Greenwich makes repeaters and power equipment used in undersea cable networks.

Alcatel will shed 430 permanent workers and 220 temporary staff in Greenwich. Most will go in January and February.

Steve Oldfield, an analyst at Bank of America, said: "This is indicative of a worsening situation in those markets." Other analysts said further redundancies were likely since over-capacity still exists among phone equipment companies.

Hopes for retaining staff levels at Greenwich were dashed when Alcatel failed to secure a contract to supply Flag Telecom with equipment for its Pacific network. As telecoms companies have retrenched capital spending or, in some cases, gone bankrupt, equipment suppliers have seen sales plummet.

In France, Alcatel will axe 1,050 full- and part-time posts. A further 887 jobs will be cut in the company's optical fibre division, primarily in the US.

Marconi, the biggest UK player in the telecoms equipment market, has seen sales slide and eliminated 3,500 jobs in Britain this year. Its share price has plunged more than 98 per cent.

Alcatel will employ about 2,350 staff in the UK after the redundancies take effect. Its British operations had sales of about 2.5bn euros (£1.6bn) in 2000. A spokeswoman said the company would not comment on the cost and profit implications of the move until it releases its third-quarter earnings at the end of October.

So far this year, the major telecoms equipment makers have slashed over 100,000 jobs.