There’s always a lot of guff spoken when mergers and takeovers are mooted and the parties involved seek to justify their honourable intentions. Alcatel’s takeover of Lucent (in America, it is referred to as a merger) is another example of this.

Boardroom buzzwords like ‘synergy’ and ‘complementarity’ dominate the official rationales behind such moves. Misleadingly, these imply some for of expansion and growth while inevitably the result in concentration and contraction. After month’s of government and regulatory probes, primarily designed to ensure that ‘vital’ US state technology and contracts did not fall into the hands of ‘cheese-eating surrender monkeys’, with the deal done the true cost emerges.

As usual, it is a cost measured in human livelihoods. As was pointed out here recently, in the wake of Q4 and 2006 results, “you can bet your last euro that ‘limited impact from headcount reduction at this point’ [a phrase used by CEO Patricia Russo last month] is shorthand for ‘we have not even started to sack people yet’.” For that story in full, click here.

Surprise, surprise... the combined company said last Friday that an expected 9,000 job reductions was now more likely to reach 12,500. That, at least, appears to be the target in a company whose current workforce is 79.000.

Despite poor results for the ‘new company’, with a 15% decline in their combined revenues over 2006, it doe not seem that Russo’s job will be among the 12,500. Strange that. Likewise, whereas the US end of the axe will encounter little more than meek resignation at the news, French employees are planning to strike. It's a new world for ms Russo to deal with.
Jim Chalmers