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Over June-September 2002, the French components manufacturer, Alcatel, announced 19,000 job losses, on top of major workforce reductions which have occurred since 2000 as the group has concentrated its activities on telecommunications components and divested factories. The latest redundancy plans reflect the world recession in the telecoms sector.
On 20 September 2002, the French-based specialist component manufacturer Alcatel, a world leader in optical transmission and rapid internet access, announced another workforce reduction plan. Some 9,000 jobs are to be cut by the end of 2003, on top of the announcement in June 2002 of plans for 10,000 job losses. Since 2000, Alcatel has seen a dramatic reduction in its workforce, which, including the new planned redundancies, will have been halved within three years, from 115,000 at the end of 2000 to 60,000 by the end of 2003 (the group employed 190,000 people in 1995).
After taking over the running of Alcatel in 1995, the current chief executive, Serge Tchuruk, has implemented a vigorous streamlining strategy, concentrating on the telecommunications industry, which he felt was the key sector of the future in the context of telecoms markets being opened up to competition, and of the growth of digital data transmission technologies (especially the internet). Thus, while the telecoms division accounted for 41% of Alcatel’s turnover in 1995 (the rest basically split between heavy industry, media and defence), since 2001 it has accounted for all of it.
In July 2001, Mr Tchuruk decided to combine this initial strategy with a second: the 'factory-less company'. He announced that Alcatel was to divest itself of around 50 of the 100 factories owned by the group worldwide. He justified this by stating: 'Four years ago, it took 19 people to produce 100 mobile telecommunications relays. Now, it takes four. Added manufacturing value is decreasing while non-material added value, like R&D, is growing constantly.' So far, around 20 of the group’s firms have been sold off, affecting 12,000 employees.
The spectacular fall in employment levels is partly the result of the divestment strategy, but the latest redundancy programmes are directly attributable to international recession in the telecoms industry, which the group failed to predict, and which is now taking its toll due to the streamlining strategy. Worse still, the latest plan basically affects the company’s R&D branch, despite it being seen as central to the group in terms of the 'factory-less company' strategy.
Alcatel’s practices have not yet involved closing down factories or initiating mass redundancies: the group has basically proceeded by divesting itself of assets (selling factories) or by not renewing temporary agency workers’ contracts or fixed-term contracts. Yet this does not guarantee that the companies that have taken over the factories will not make mass redundancies.
Trade union criticism of Mr Tchuruk’s strategy of concentrating on the telecoms sector has been unanimous. They have also called on the state to provide financial aid to the industry. The General Confederation of Labour-Force ouvrière (Confédération générale du travail-Force ouvrière, CGT-FO), for example, has asserted that the state should deal with the 'beleaguered' telecoms industry 'as it did with the steel and shipbuilding industries when they needed help, by launching a plan to galvanise this industry that has suffered considerably from the liberalisation of the market'. A work stoppage was planned for 3 October 2002 to protest against the 19,000 redundancies announced since June.