Alcatel CEO Promises Cost Cuts as Loss Widens
French telecom equipment maker Alcatel-Lucent posted its second straight quarter of losses on Friday, amid tough market conditions and a technological shift.
The company disappointed the market with a 146 million euro net operating loss, worse than expectations of a 108 million euro loss.
Ben Verwaayen, CEO of Alcaltel-Lucent told CNBC Europe's "Squawk Box" that over the past nine months "the market has been awful for everybody," and promised to execute "what's necessary to restructure."
"The numbers that we have shown are a clear sign of two factors – a market in transition and a company in transformation," he said.
"The market is what the market is today," he added. "In Europe, it is a market that doesn't invest aggressively in the next generations and that takes its toll."
Alcatel-Lucent, which employs 76,000 employees, announced a cost-cutting plan in July which would include 5,500 job cuts worldwide.
Verwaayan said that this was part of a "restructuring plan" that the company was "determined to execute," despite a potential backlash from French labor unions that could ask the French government to intervene to block the layoffs.
"My only focus today is that we're going to execute cost reduction, margin improvements and balance sheet improvements
"We've got a plan that we are really going to execute," Verwaayen said in an attempt to reassure investors growing wary as the company's stock reached a 23-year low and as it has declined 57 percent from a year ago. Alcatel-Lucent also has the dubious title of being the most shorted stock in France, signaling that investors are not confident in the company's future.
Virginie Maisonneuve, head of global and international equities at Schroders, said that in a volatile market it was dangerous to be short on a stock like Alcatel-Lucent.
"In a stock like that, it's actually quite dangerous, in my view, to be short."
"[It's] important to have a new way of thinking not only about stocks but a new way of thinking about returns as volatility has picked up a lot," she said.