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Alcatel-Lucent to redirect majority of R & D spending to IP Division
OTTAWA — Alcatel-Lucent has announced a major corporate restructuring that could have a big impact on its Ottawa operations and cement the technology industry’s comeback in the nation’s capital.
The company quietly announced The Shift Plan initiative on Wednesday. Alcatel will back out of legacy phone systems and computer networking equipment and focus solely on next-generation networks and ultra-broadband access information systems. The move is aimed at preparing Alcatel for an improving economy, which will likely see corporations begin to replace aging communications structures with new, more secure offerings.
“We are taking comprehensive action to position Alcatel-Lucent at the heart of the digital ecosystem, a place where we will be able to properly capitalize on our many strengths,” said chief executive Michel Combes.
Combes, a former Vodaphone executive, has been working on the restructuring since he took the reigns at Alcatel in April.
The company will cut $1.4 billion in costs and sell more than $1.4 billion in assets, and refocus its $3.2-billion annual research and development budget on Internet Protocol (IP) routing, transport and related technologies, and ultra-broadband, super high-speed Internet access.
The refocus will take place in stages as research funds are gradually drained from other areas of the company to prop up IP technology development. By 2015 the company wants to dedicate a full 85 per cent of all annual R & D funding on new technologies”.
Roughly 50 per cent of all of Alcatel’s research and development in IP technologies is conducted on the company’s Kanata research campus, which currently employs 2,300 people. The remainder is done on its Bell Labs research campus in New Jersey. However, Ottawa is home to Andrew Mcdonald, head of Alcatel-Lucent’s IP Platforms division.
Alcatel spokesman Kurt Steinert said it was far too early to discuss how the company’s restructuring plans would affect staff levels. However, he said in a statement that “Kanata remains an important hub in the region, most notably as a key centre for our IP Division, which continues to be one of our flagship businesses.”
Alcatel had shelled out $7 billion U.S. in 2000 for Newbridge Networks, the Kanata company created by Terence Matthews. Newbridge was a world leader in a technology called asynchronous transfer mode, a clever way of combining voice, data and video on the same network to save money. That division became Alcatel’s flourishing IP business.
The business has grown by about 24 per cent annually over the past two years, a bright spot for the firm, which has seen many other divisions slump. Alcatel posted sales of $14.9 billion in 2012.
Thanks to companies that have called the nation’s capital home, including once-great firms like JDS Uniphase and Nortel Networks, Ottawa has an abundance of talent when it comes to telecommunications and networks. The talent is something that Jean Monty, who ran Nortel from 1993 to 1997, knows well. Monty has been on the board of directors at Alcatel-Lucent since 2008.
Read more at ottawacitizen.com
