PARIS (AP) _ Alcatel, the French telecommunications equipment group, announced Thursday plans to cut 12,000 jobs over the next two years, mainly in the United States.
Most of the job cuts, which amount to 10 percent of the work force, are to come from restructuring the group’s U.S. operations, said Chairman Serge Tchuruk.
Even with the cuts, Alcatel will fail to meet an operating profit target of 8 percent of revenues this year, Tchuruk said.
Speaking at a news conference, Tchuruk said he expects to improve operating profit margins to 7 percent from 4 percent in 1998. The 8 percent target was set in 1996.
``I am still keeping the 8 percent target in view, but we are taking longer to get there than I had hoped due to the slowdown in the (telecoms) switching market,″ he said.
``But for next year, I feel very secure saying we will be at 7 percent.″
To improve company profitability, Tchuruk said there will be significant job cuts as the company lays off staff and subcontracts business in the next two years.
Tchuruk said the 10 percent staff reduction in 1999 and 2000 would save 300 million euros ($327 million) a year.
Alcatel cut 770 jobs in 1998.
Chief Financial Officer Jean-Pierre Halbron repeated that the company’s telecom activities should post a 40 percent rise in operating profit in 1999 from $626.7 million in 1998, while the cables and components division should show a steady performance after turning in operating profits of $464 million.
Meanwhile, French steelmaker Usinor said Thursday that it would shed 3,000 jobs over the next three years.
Chairman Francis Mer said the company will look at ``all available options″ for reducing its work force. He added that 1,500 jobs will be cut in 1999 and the remaining 1,500 over 2000 and 2001.
Usinor is in the midst of a restructuring plan started this year.