Alcatel-Lucent is in the process of selling its global fixed-line R&D department and expects to reach an agreement by the end of the third quarter.
"The headquarters are in discussions with several potential buyers. It is a global decision and the entire R&D of fixed-line products of Alcatel-Lucent will be sold," a source close to the company\'s Chinese subsidiary told telecomasia.net.
The source said that the decision is a result of the global decline in revenue from fixed-line products.
The unit includes the R&D for its S12 and E10 switches and its Media Gateway Controller-10 (MGC-10), an NGN product manufactured in Germany.
It is understood that approximately 200 people in Shanghai will be affected by the sale. The company\'s Chengdu R&D center is expected to remain intact as it focuses on GSM products.
Earlier this month, Alcatel-Lucent sealed a 10-year global alliance with HP to deliver converged IT and telecom solutions to enterprises. It is reportedly considering transferring up to 1,000 jobs to HP as part of the deal.
Alcatel-Lucent recorded a net loss of €380 million ($532 million) on revenues of €3.4 billion in the first quarter of this year. The company has lost about €8.1 billion over the last nine quarters, and does not expect to make a full-year profit until 2011.
The vendor has already flagged that it is cutting R&D spending on older technologies, as well as manufacturing, supply chain and procurement costs.