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SCOTT JAGOW: Anytime two companies merge, you’re probably gonna have layoffs. The bigger the companies, the more job cuts usually. Alcatel and Lucent joined last year to create the world’s biggest telecom equipment maker. And now, here come the layoffs. Alisa Roth reports.

ALISA ROTH: Alcatel-Lucent says it’ll cut nearly 40 percent more jobs than it initially planned: 12,500 workers will be let go over the next three years.

That’s partly because the Paris-based company lost more than $800 million in the fourth quarter. And analyst Andre Chassagnol says don’t expect the situation to improve right away.

ANDRE CHASSAGNOL: 2007, the first quarter will be bad.

He says the merger of AT&T and SBC hurt Alcatel-Lucent, since the Americans spent less money on equipment. And Alcatel’s still struggling with tough competition in the wireless sector.

As part of its austerity program, Alcatel Lucent will also try to reduce costs in the supply chain, cut back on the number of products it sells and get rid of duplicate jobs.

Analyst Chassagnol says things should start to look up by the second quarter of this year.

CHASSAGNOL: I think that we have to think about the long run. So I think we have to wait and be very patient.

French workers are calling for a strike next week to protest the proposed cuts.

In New York, I’m Alisa Roth for Marketplace.