Unless your company is Chinese, it’s a tough time to be a telecoms engineer

Unless your company is Chinese, it’s a tough time to be a telecoms engineer

By Jason Karaian @jkaraian October 9, 2013

Alcatel-Lucent’s announcement of 10,000 job cuts caught many by surprise, not least the French government, which vows to fight the layoffs alongside unions. Those familiar with trends in the telecoms equipment industry are not as surprised by the cuts; they are only the latest in a string of layoffs at network suppliers, driven by stiff competition from Chinese challengers.Huawei and ZTE have rapidly taken market share from the likes of Alcatel-Lucent, thanks to lower costs and financial support from the cash-rich Chinese state. In its latest scorecard of infrastructure vendors, research firm Infonetics ranked Huawei first according to its index of qualitative and quantitative measures. The Chinese company is now the world’s second-largest supplier of telecoms network equipment, a “feared and formidable competitor” for incumbent vendors like Alcatel-Lucent, Ericsson, Nokia and Cisco, according to Infonetics.

Huawei aims to double its $35 billion revenue in 2012 by 2017, while its Western rivals desperately cut costs to defend their current positions. Non-Chinese nationals account for about a fifth of Huawei’s 150,000 employees, according to the company. This share may be set to grow, as more than 50,000 jobs have recently been cut by American and European telecoms vendors:

Alcatel-Lucent: The French-American group announced 10,000 job cutsyesterday.

Cisco: The American equipment maker announced 4,000 layoffs in August, following 6,500 cuts as part of a previous restructuring plan.

Ericsson: A struggling Swiss-Swedish joint venture with STMicroelectronics was dissolved in August, with 1,600 jobs lost, on top of 1,700 cuts made the year before. The Stockholm-based parent company also reduced payrolls in its home country by 1,399 in March.

Nokia Siemens Networks: The former Finnish-German joint-venture, now fully owned by Nokia, has cut more than 20,000 jobs over the past two years, with another 8,500 layoffs under consideration according to a Bloomberg report in August.

About bambooinnovator
Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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