Alcatel-Lucent on Monday announced a new operating model, seeking to revive its worldwide telecommunications equipment business.
Alcatel-Lucent explained that benefits of the simplified model include a focus on profitable markets and customers, an acceleration in the pace of transformation and a simplification of management layers across the company.
"The objective of the new operating structure is to strengthen Alcatel-Lucent's presence in key telecommunications products and services through a unified business group," Alcatel-Lucent CEO Ben Verwaayen said in a statement. "A streamlined executive committee will oversee the simplified business model, with a newly-appointed chief operating officer focused on executing operational improvements."
Following a disappointing second quarter, Alcatel-Lucent outlined plans over the summer to save 1.25 billion euros by the end of next year, and cut 5,000 jobs or 7 percent of its global workforce.
Alcatel-Lucent on Monday made a number of management announcements under its new structure. The Paris-based company has tapped its chief financial officer, Paul Tufano, to serve as chief operating officer as well with global responsibility for supply chain, procurement and three individual businesses: enterprise, strategic industries and submarine. Among other changes, Alcatel-Lucent named Robert Vrij as president for global sales & marketing.
Alcatel-Lucent revealed the worldwide business group will replace the current regional operating structure with four global product and service business units: core networks, fixed networks, wireless and platforms. The company also noted, "All back-office and business support functions will be part of a new central administrative system for greater efficiency."
Alcatel-Lucent, which was formed in 2006 through the merger of Alcatel and Lucent Technologies, said the new organization will become effective on January 1, 2013.
"By pursuing a careful strategy reducing the company's breadth of global coverage, Alcatel-Lucent can trim costs without damage to the sales initiatives in strategically important regions such as the U.S., Europe and Asia," Yankee Group principal analyst Ken Rehbehn said Friday in a statement. "The end result will be a fundamentally different Alcatel-Lucent, but one that should be positioned for a sustainable future."