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Alcatel may axe half of R&D staff at Livingston

Posted on: Wednesday, 11 June 2003, 06:00 CDT

ALCATEL, the French telecommunications giant, has sent letters to at least half of the research and development staff at its Livingston, West Lothian, opto-electronics operation, warning of the risk of redund-ancy, according to a source at the firm's Paris headquarters.

The move follows Alcatel's announcement last month that it had signed an agreement to pay US optical equipment firm Avanex the bulk of a (pounds) 40m deal to take the loss-making optronics unit off its hands.

The Paris source added that staff at Livingston have interpreted the latest communicat-ion as a precursor to non-voluntary redundancy packages, expected to be finalised by the end of the month, and that those who received the letters will be asked to leave.

"Every member of staff did not receive a letter," the source said.

An Alcatel spokesman confirmed that 62 of the remaining 162 staff at the Livingston plant will be shed, but was unable to clarify how many R&D jobs were at stake.

"The jobs to go will be mixture of engineering and support jobs. Manufacturing will not be affected," the spokes-man said.

However, the fact that R&D has apparently been targeted adds fuel to fears that Avanex has purchased Alcatel Optronics for its new relationship with Alcatel, the parent, but eventually plans to wind down the Livingston plant. Under the terms of the contract, Alcatel will own 28% of Avanex.

The spokesman said: "The future of the Livingston site has been underpinned by its part in the wider deal with Avanex."

The Livingston R&D unit has previously escaped most of the job cuts, as the company attempted to streamline itself.

Avanex, which is scheduled to take over the plant on September 30, did not return calls attempting to clarify its strategy for the Scottish plant.

However, a statement issued by Christian Reinaudo, Alcatel's executive vice-pres-ident, at the time of the agreement, said: "We have secured the future for Alcatel Optronics and will be able to achieve synergies and economies of scale that will allow it to remain competitive."

Alcatel took over the Livingston operation after buying Scottish hi-tech star Kymata in July 2001 in an (pounds) 82m shares deal.

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