* French president calls on Alcatel to review plans
* Alcatel to cut nearly one in seven of its employees
* Plan is to re-focus on new high-growth areas
By Gwénaëlle Barzic
PARIS, Oct 8 (Reuters) - French president Francois Hollandecalled on Alcatel-Lucent on Tuesday to save as manyjobs as possible in France after the telecoms equipment makersaid it plans to cut 10,000 jobs worldwide, about 14 percent ofits entire workforce.
The announcement by the Franco-American group, which plansto cut as many as 900 posts in France, was criticised byHollande's government which is having to battle with recordlevels of unemployment across the country.
"In the framework of the decisions to be taken, therestructuring plan, it should be examined how the job cuts canbe limited as much as possible," Hollande told reporters in thecentral town of Saint-Etienne, where he was promoting governmentefforts to cut unemployment.
Other government officials acknowledged measures were neededto save the group in which France has a 3 percent stake.
Alcatel-Lucent said the job cuts represented itslast chance to turn itself around and stem losses.
The product of a 2006 transatlantic merger aimed at creatinga global giant, Alcatel-Lucent told a European works councilmeeting it intends to axe nearly one in seven of its employees.
"Everyone knows this plan is the last chance. The company isin a very serious situation," Chief Executive Michel Combes, thelatest of three CEOs since the merger, told Le Monde newspaper.
The group plans to focus on high-growth areas ranging from4G mobile to high-speed broadband, and to lower fixed costs bymore than 15 percent, saving a total of 1 billion euros ($1.36billion).
Including past measures, the total cost of the "shift plan"is 1.2 billion euros, an amount the company expects to fundthrough asset sales.
Alcatel's share price rose 2 percent after the news butclosed down 4 percent at 2.71 euros as the government'sopposition to its plans intensified. The stock has almosttripled in value this year on buyers' hopes that Combes, aformer chief executive of Vodafone Europe, can rescuethe business.
"The group is eating up a lot of cash and is unable toenhance its profitability, so some kind of change was needed tomake sure it has a long-term future," said one Paris-basedfinancial analyst who declined to be named.
The group, which employs 72,000 staff worldwide and competeswith larger rivals Ericsson of Sweden, China's Huawei and Finland's Nokia, has posted fivestraight quarters of net losses.
Altogether, 4,100 posts will go in Europe, the Middle Eastand Africa, 3,800 in Asia Pacific, and 2,100 in the Americas.
France's CFDT union said it would fight a plan that entailedcuts to about 15,000 posts, although 5,000 new jobs will becreated, giving the overall loss of 10,000. Nine hundred jobswould go in France, with the closure or disposal of five sites.
"The CFDT is aware of the seriousness of the situation anddeplores this," it said in a statement. "But once again it isthe staff that are paying the price ... We will fight this planand make proposals to change it."
The union said Alcatel was planning to close its sites inthe French cities of Rennes and Toulouse quickly, and sell itsEu, Ormes and Orvault sites by the end of 2015.
France's left-leaning industry minister Arnaud MontebourgMontebourg, who has led a campaign for French consumers andcompanies to buy home-grown products, said the loss of hundredsof French jobs was "excessive."
He called on the country's network providers to help thefirm by favouring its products over those of cheaper rivals, andasked Alcatel-Lucent to review its cost-cutting plans with tradeunions.
"We have asked management to revise the restructuring plandownwards," he told parliament. "We can't keep on paying theprice of their errors."
But other sources in President Francois Hollande's Socialistgovernment, which has watched Alcatel-Lucent's problems closelyas it battles rising unemployment in France, emphasised that theplan was an attempt to get the group growing.
SPECULATION
The Alcatel-Lucent merger was an attempt to pool resourcesbut any savings were lost due to fierce price competition in the sector and as slow economies, particularly in Europe, denteddemand for telecom equipment.
Last year the group swung to a net loss of 1.2 billion euros- the biggest since 2008 - largely due to a writedown on itsmobile unit and restructuring costs from an earlier plan to layoff 5,000 workers.
The restructuring will heighten speculation of a possibleapproach by Nokia, a move which sources close to the matter saidlast month the Finnish group was discussing internally.
Alcatel-Lucent confirmed it would dedicate 85 percent of itsresearch and development budget in 2015 to next-generationtechnologies, up from 65 percent today. Spending on oldertechnologies would be cut by 60 percent.
The group has a long history of innovation, for examplepioneering the DSL technology that has brought quick Internet tomillions through standard copper telephone lines.
However, it has been slower to trim its costs than rivalssuch as Nokia Siemens Networks, which cut around a quarter ofits workforce some two years ago.
Vodafone (VOD)
