Alcatel, Europe's biggest telecommunications equipment maker, yesterday announced plans to axe another 10,000 jobs at a cost of €500 million as it warned of a further slump in sales.

The latest cuts will reduce the company's headcount to 60,000 by the end of 2003 from 83,000 in June, and from nearly 100,000 last year. "It's like a moving target. It just goes on and on," said one Alcatel executive.

A spokesman for the company said it would be some weeks before it was known whether the cuts would affect the group's Irish operations.

"While individual operations throughout the world are being kept under review on an ongoing basis, there is currently no indication that there will be any effect on Ireland from today's announcement," he said.

Alcatel Ireland employs 85 people between its network services centre at Bandon in Cork and its sales and marketing division at Citywest in Dublin.

Mr Serge Tchuruk, Alcatel's chief executive, is under mounting shareholder pressure to stabilise the company amid speculation that he could suffer the same fate as Mr Jean-Marie Messier and Mr Michel Bon, who were ousted from the top jobs at Vivendi Universal and France Telecom.

Alcatel's shares swung violently on the Paris bourse yesterday, falling sharply on concerns about the company's liquidity before rallying after the restructuring announcement. They closed 7.6 per cent higher at €2.70.

Alcatel yesterday insisted it could meet its day-to-day financial obligations without asset sales but said the €500 million restructuring provision would be funded by disposals.