Alcatel, the French telecoms equipment maker, is to sell or close more than 100 factories by the end of next year. It's the second shock in two days from France's tech sector.

The firm, which had 120 factories last year, aims to cut back its plant tally to 12 or fewer, chairman Serge Tchuruk has revealed.

"We are going to be a fab-less [factory-less] company pretty soon," Mr Tchuruk told the Wall Street Journal newspaper.

He declined to specify the impact on the firm's 110,000 workers.

The news comes less than a month after Alcatel announced plans to cut 900 jobs in North America, blaming poor trading conditions.

And it follows a profits warning on Tuesday by IT and management consultancy Cap Gemini, which prompted falls among technology stocks on European stock markets.

On Wednesday, investors were also eyeing Alcatel's US rival Lucent Technologies, following reports it planned to lay off as many as 10,000 more staff.

The French and US companies had earlier this year discussed, but failed to agree, merger plans.

Focus strategy

Under the new plans, Alcatel will sell factories to contract manufacturers, and some will continue to manufacture Alcatel products, Mr Tchuruk said.

Some plants may be disposed of with parts of the Alcatel business, as part of a strategy to focus the firm on core areas of broadband access equipment and services activities.

"I am of the CEO [chief executive officer] style who is more hands-on," Mr Tchuruk said.

"And hands-on means you can embrace one business, but not dozens."

The move is designed to help the firm to benefit from an upturn in technology markets "some time next year".

"I have no doubt [about] the long-term health of the tech industry," he said.

Stalwart business

Established in 1898, Alcatel is a major player in providing next generation networks, such as telecoms infrastructure and the backbone for the internet.

The company operates in 130 countries and reported sales of 31bn euros in 2000.

On the Paris stock exchange, Alcatel shares, which hit a morning high of 23.85 euros, fell back to stand up 1.45% at 23.10 euros in afternoon trade.