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Alcatel scales back French job cuts

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[January 16, 2014]  PARIS (Reuters)  Franco-American telecom gear group Alcatel-Lucent <ALUA.PA> will cut fewer jobs in France than previously planned under moves to slash 10,000 posts worldwide in an attempt to stem losses, its chief executive told Le Monde newspaper.

The French share of the cuts will now amount to less than 700, down from 900 announced last year, Michel Combes told the daily in an interview published on its website on Wednesday.

Alcatel has come under pressure over the cost-cutting plans from France's ruling Socialist politicians, who are struggling to tackle high unemployment and at one stage warned that the government could use new rules to block the job cuts.

As recently as last week, Industry Minister Arnaud Montebourg pressed Alcatel to make a bigger effort to preserve jobs and facilities in France. Combes has said the restructuring plan is its last chance to turn the company around.

The CEO said 170 out of the 250 research and development staff at its Orvault site in northwestern France, which it is closing, would switch to a specialist telecoms business set up by engineering consultancy Altran <ALTT.PA>.

Alcatel was also holding talks with other companies in the region, he told Le Monde.

Combes added that calls by politicians for French telecom operators to rally around Alcatel had led to "concrete results".

In addition to a "small cell" mini-mobile antenna deal with Orange <ORAN.PA>, Vivendi's <VIV.PA> SFR recently picked Alcatel to build its fibre optic network and could agree further contracts, Combes said.

Alcatel was also in talks with Bouygues Telecom <BOUY.PA>, Numericable <NUME.PA> and Outremer Telecom over mobile and fixed-line contracts.

France contributed 5.7 percent of 2012 revenue of 14.44 billion euros ($19.8 billion). Out of an overall workforce of 72,000, 8,300 are in France  less than half the number in 2006 following previous cuts.

(Reporting by Gwenaelle Barzic and James Regan; editing by Elaine Hardcastle)

[ 2014 Thomson Reuters. All rights reserved.]

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