Alcatel-Lucent (Euronext Paris and NYSE: ALU) has unveiled a new, simpler operating model focused on its “core products,” a strengthened sales organization, and reshaped corporate functions. The changes are part of the company’s efforts to deliver the results promised from its “Performance Program,” announced on July 26: €1.25 billion of cost savings by the end of next year (see "Alcatel-Lucent to cut 5000 jobs").
Ben Verwaayen, Alcatel-Lucent’s CEO, asserted, “In today's markets it makes sense to play to your strengths. The objective of the new operating structure is to strengthen our presence in key telecommunications products and services through a unified business group.”
A smaller executive committee will oversee the simplified business model, with a newly appointed chief operating officer focused on executing operational improvements. Paul Tufano will fill the new chief operating officer role and will assume worldwide responsibility for supply chain and procurement as well as three individual focused businesses (Enterprise, Strategic Industries, and Submarine), in addition to his current role as chief financial officer.
Another key appointment is Philippe Keryer, who will become president of Networks & Platforms, a worldwide business group that will replace the existing regional operating structure with four global product and services business units, each with full P&L responsibility, comprising:
- Core Networks, leveraging the company’s work in IP and optics; IP and optics will be placed under the management of Basil Alwan.
- Fixed Networks, which will key an eye on potential synergies with small cell deployment.
- Wireless, focusing on serving existing customers in North America, China, and EMEA.
- Platforms, evolving the company’s High Leverage Network capabilities into unified software platforms for control, optimization, and network analytics.
Other changes to the top management team, effective January 1, 2013, are:
- Robert Vrij becomes president global sales and marketing, leading a single global sales organization to oversee and manage all customer-facing commercial relationships.
- Stephen A. Carter becomes president, managed services and executive vice president, corporate restructuring; he will oversee the Performance Program as well as corporate marketing and corporate communications.
George Nazi will remain president of the previously created Global Customer Delivery division. Jeong Kim also will retain his role as president of Bell Labs and chief strategy officer, responsible for the company’s patents assets/portfolio.
In addition, due to the company’s activities 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 the company’s commercial operations in that country.
Meanwhile, all back-office and business support functions will be part of a new central administrative system for greater efficiency.
“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,” Verwaayen promised. “Subject to the completion of this process, our new organization will become effective on January 1, 2013.”
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