Telecoms equipment maker Alcatel is poised to cut 10,000 jobs following the announcement that it will post a loss this year.
The French company was expected to make a reasonable profit in 2002, but has now said that it will have to double provisions to €1.2bn (£800m) to cover the job losses. It has also dropped forecasts that sales would rebound in the second quarter of the year.
Alcatel has seen demand for its products dry up like most other companies in the beleaguered telecoms sector. Its shares, once seen as a safer bet than most other companies, have fallen by more than 90 per cent.
The warning follows bad news from Lucent and Nortel, which have had to contend with price-squeezing and falls in customers' capital expenditure.
Jean-Pascal Beaufret, Alcatel's recently appointed chief financial officer, told The Financial Times: "The question is whether we are past the worst, and that's really hard to answer.
"We have come back to levels of capital expenditure for the operators which are very low compared with the end of the 1990s, but I cannot foresee any rebound."
He added that, if the crisis deepened, Alcatel would have to shut down some businesses or terminate some product lines.
The company made 24,300 of its workforce redundant last year in response to the slowdown. The latest round of cuts will be concentrated mainly in Europe and the US.
Beaufret said that another 20,000 staff would leave the firm in 2003 as a result of outsourcing and divestments, leaving Alcatel with a headcount of 70,000.
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