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France's Montebourg presses Alcatel-Lucent to reduce job cuts

The logo of the telecom equipment maker Alcatel-Lucent is seen on the company site building in Rennes, western France, October 15, 2013. REU
The logo of the telecom equipment maker Alcatel-Lucent is seen on the company site building in Rennes, western France, October 15, 2013. REU

PARIS (Reuters) - France's industry minister pressed struggling telecoms company Alcatel-Lucent on Friday to cut fewer jobs as part of a restructuring aimed at stemming years of losses.

The Franco-American group ran into opposition from President Francois Hollande's Socialist government when it said in October it would lay off 10,000 workers worldwide, including 900 in France.

As unions and management negotiate layoff terms for French employees, Industry Minister Arnaud Montebourg appealed to Alcatel CEO Michel Combes to make a larger effort to preserve jobs and facilities in France.

Montebourg "forcefully restated the government's demand to keep as many of Alcatel-Lucent's jobs as possible in France, as well as a top-notch industrial base", the minister said in a statement.

Under labor rules revised in May, Alcatel-Lucent must reach agreement on the terms of its restructuring plan with unions in France before the staff reduction can go ahead. Unions in the talks have said they are unlikely to block the process.

Montebourg asked the company - whose restructuring is the sixth since it was formed in a 2006 merger between Alcatel and Lucent - to show how they would reduce job cuts, and Combes said options were being discussed in the talks, according to the statement. Alcatel-Lucent declined to comment on the meeting.

With unemployment near a record 11 percent, Hollande is fighting to preserve jobs in Europe's number two economy and save face by fulfilling a pledge to reverse the trend of rising job losses by end-2013.

In addition to a subsidized jobs program that has helped to reduce youth unemployment, Hollande said in his New Year address that he would take further steps to reduce labor costs that are seen as a brake on hiring, without specifying how.

Jobless claims rose in November following an unexpected fall the previous month, casting doubt on a possible year-end drop. Data for December will be published on January 27.

Combes has insisted that Alcatel-Lucent has no choice but to reduce headcount and refocus on its core telecoms equipment operations, saying it is a last chance.

Montebourg has toned down attacks on corporate figures since he lost a public battle with ArcelorMittal chief executive Lakshmi Mittal over plans to shut down blast furnaces in eastern France. But he remains an outspoken advocate of state intervention in corporate affairs.

(Reporting By Nicholas Vinocur and Gwenaelle Barzic; Editing by Larry King)

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