Organisational shake-up for Alcatel-Lucent

BUSINESS

Alcatel-Lucent has unveiled a new operating model focused on core products, a strengthened sales organization and re-shaped corporate functions to deliver the Company’s Performance Program; the strategic initiative announced on July 26 to generate Euro 1.25 billion of cost savings by the end of 2013.

Ben Verwaayen, Chief Executive Officer, said: “In today's markets it makes sense to play to your strengths. Alcatel-Lucent’s leadership in core networking, reflects our innovation excellence and long-standing customer relationships.   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.  A streamlined Executive Committee will oversee the simplified business model, with a newly-appointed Chief Operating Officer focused on executing operational improvements.  This announcement simplifies our operating model and puts our Performance Program at the forefront of our 2013 objectives."

Benefits of the program and new operating structure will enable Alcatel-Lucent to:

• Focus on profitable markets and customers around the world
• Optimize tendering and sales in a single global sales organization
• Accelerate pace of transformation
• Maintain strong innovation engine with continued R&D investment
• Manage patent portfolio as a dedicated profit center
• Concentrate on higher value-added contracts in Managed Services
• Simplify management layers across the company

To achieve these outcomes, the following changes will come into effect from January 1, 2013:

Paul Tufano becomes Chief Operating Officer, with worldwide responsibility for Supply Chain, Procurement and three individual focused businesses (Enterprise, Strategic Industries and Submarine), in addition to his current role as Chief Financial Officer.

Robert Vrij becomes President Global Sales & Marketing, leading a single global sales organization to oversee and manage all customer-facing commercial relationships.

Stephen A. Carter becomes President Managed Services & EVP Corporate Restructuring; overseeing the Performance Program and Corporate Marketing & Corporate Communications.

Philippe Keryer becomes President of Networks & Platforms. This worldwide business group will replace the existing regional operating structure with four global product & services business units, each with full P&L responsibility, comprising:

i. Core Networks, leveraging global leadership in IP and Optics; IP and Optics will be placed under the management of Basil Alwan leveraging Alcatel-Lucent’s leadership position in both of these fast growing markets.

ii. Fixed Networks, investing further in the Company’s leadership position in this market and the synergies with Small Cell deployment.

iii. Wireless, focusing on serving our existing customer base in North America, China and EMEA.

iv. Platforms, evolving the Company’s High Leverage Network capabilities into unified software platforms for control, optimization and network analytics.

George Nazi remains President of the previously created Global Customer Delivery division.

Jeong Kim remains President of Bell Labs and Chief Strategy Officer and will be responsible for the Company’s patents assets/portfolio.

In addition to the above, due to the Company’s unique position in the Chinese market through the Alcatel-Lucent Shanghai Bell (ASB) joint venture, Rajeev Singh-Molares, working with the chairman of ASB, will take on a dedicated role focusing on the transformation and development of our commercial operations in China.

All back-office and business support functions will be part of a new central administrative system for greater efficiency.

Commenting on the new operating model, Ben Verwaayen added: “The Performance Program announced on July 26 is the spearhead of these changes. We are putting in place a simple, robust delivery mechanism for the company to ensure that Alcatel-Lucent meets its target of a total cost saving of Euro 1.25 billion by the end of next year.”

The company says: "We will engage with our employee representatives wherever required by law, through discussions or consultations, before we finalize and then implement this new operating model. Subject to the completion of this process, our new organization will become effective on January 1, 2013."