Alcatel-Lucent’s new CEO Ben Verwaayen today unveiled the company’s high-profile strategic review, aimed at cutting costs and halting losses. The world’s largest telecoms equipment vendor is to lay off 1,000 managers and reduce the number of contractors by approximately 5,000 as it seeks to stem seven consecutive quarterly losses. The company declined to forecast a timeframe for achieving net profit but aims to achieve an adjusted operating profit around breakeven in 2009. This is in light of a pessimistic forecast for the 2009 telecoms equipment market, which it believes will decline between 8 and 12 percent. By fourth-quarter 2009, Alcatel-Lucent hopes to achieve total annual savings of €750 million.

The vendor reaffirmed its mobile aspirations (following recent speculation it could quit the sector), stating it will “reinforce areas of leadership” such as CDMA EV-DO, and boost investment in areas such as LTE and WCDMA. However, its WiMAX ambitions appear rather more muted, as it said it will reduce spending on the technology by “partnering, co-sourcing and participating in the consolidation of the industry” to drive down such costs. Reuters later quoted Verwaayen as saying the company will exit the mobile WiMAX business altogether. In a statement, Alcatel-Lucent focused its new strategy on pushing access to the Web from any device. “This strategy requires providing an open environment, which does not exist today, where all these trusted capabilities can be available between the network and ‘over-the-top’ applications typical of Web 2.0.” The company will focus efforts on three markets – service providers, enterprises, and selected verticals – and on four key areas of investment: IP, optical, mobile and fixed broadband, and applications enablement. The US$34 billion transatlantic 2006 mega-deal between Alcatel and Lucent has left the group worth US$5.8 billion, less than three times the amount it targeted in annual synergies alone. Shares have lost 62 percent this year after a 55 percent decline in 2007.