Telecoms kit maker Alcatel-Lucent is to cut 5,000 jobs as part of a move to save €750m (£588m) amid results which saw the company haemorrhaging profits for the second quarter.
For the three months to June, the company lost €254m in profits, compared with profit gains of €43m in the same period last year.
The Paris-based company saw sales fall by 7.1% to €3.5bn, compared with the same period last year.
In addition to the job cuts, the company is already embarking on a €1.25bn cost-cutting programme, to be complete by 2013.
Ben Verwaayen, CEO of Alcatel-Lucent, admitted the company was experiencing “challenging profitability” in certain regions.
“These times demand firm actions, but as this will involve shrinking our employee base and exiting certain non-profitable contracts, we will use The Performance Programme to execute in a measured fashion,” he said.
The company also said it would restructure unprofitable managed services contracts with associated headcount reduction.
Alcatel-Lucent employs 78,000 staff worldwide. It is not clear how many UK jobs will be lost.
The news follows rival Huawei’s results, which revealed the Chinese kit maker's profits fell by 22% to ¥8.79bn (£0.9bn) in the first half of the year, compared with the same period last year.