Bulk of the cull is likely to impact Alcatel-Lucent India's key business support functions and its people-centric managed services vertical where nearly 7,000 employees are engaged primarily in maintaining and managing Reliance Communications' countrywide CDMA and GSM networks and Bharti Airtel's landline and broadband networks.
In July, the Paris-based phone equipment supplier had said it would cut 5,000 jobs across global units as part of an organisational rejig to optimise costs, becoming the second European networks vendor to announce staff reduction plans after Nokia Siemens Networks said it would axe 17,000 jobs globally to trim losses.
Alcatel-Lucent, in response to ET's specific queries, did not reveal the employee count reduction target in India as it is yet to conclude mandatory consultations with unions, but two people privy to the developments said the restructuring exercise, internally classified as 'Performance Programme', could trigger sizeable redundancies in India.
"We will not comment on specific details of the Performance Programme as it affects people, until we have completed the legally-required consultations with workers' representatives," said an Alcatel-Lucent spokesman, adding that the restructuring exercise would not impact its 3,500-strong India R&D staff distributed across Bangalore, Chennai and Gurgaon hubs.
An executive with direct knowledge, however, said Alcatel-Lucent is reviewing existing managed services contracts in India and associated people requirements in the backdrop of its biggest client Reliance Communication's stated plans to go for a multi-vendor outsourcing deal shortly.
Alcatel-Lucent Managed Solutions, a 67:33 JV between Alcatel-Lucent and RCOM, has managed the Anil Ambani-promoted telco's mobile networks for the past four years but it "could lose substantial business and face large-scale staff redundancies if RCOM outsources network management to multiple vendors", said the executive quoted above.
The French gearmaker, it is learnt, is also reviewing future manpower needs at Alcatel-Lucent Network Management Services India, its 74:26 JV with the Bharti Group, which manages Airtel's landline network. "Managing and maintaining a pan-India fibre-optic network is both labour intensive and expensive since fibre-cuts are frequent," said another executive, hinting that a re-evaluation of people costs is in the offing amid the dip in infrastructure spends by telcos.
Staff redundancies further stare Alcatel-Lucent India in the face, following its other key managed services customer, Uninor's recent decision to ramp down mobile operations in Kerala and Orissa, which are both being managed by the French networks vendor since 2009.
India's managed services market for network vendors is pegged upwards of $2 billion and Alcatel-Lucent commands roughly a 17% market share, behind Ericsson and NSN, who jointly control nearly 65% of the market.
Its annual India revenues are in excess of $400 million. Alcatel-Lucent's latest overtures could provoke similar action from other global network vendors, who have also seen a slowdown in carrier spends after the Supreme Court, in its February 2 orders, revoked 122 mobile permits issued by ex-telecom minister A Raja in a controversial first-come-first-served policy.
The world's largest gearmaker Ericsson's India revenues fell 39% in the April-June quarter to Rs 1,340 crore compared to the year-ago period. Of the two Chinese gearmakers, ZTE has implemented a 20% temporary salary cut in its India unit to optimise resources while Huawei India has relocated 350 employees to work on foreign projects in absence of adequate business.
