Alcatel is to shed a further 10,000 jobs in Europe on top of the 23,000 job losses worldwide it announced earlier.
It's warning that it expects to make a full year loss of €5bn.
It now aims to cut costs by 20%.
Scotland will lose 90 jobs, with the rest going on the continent.
A company spokesman says the job cuts will fall "across the board."
Alcaltel has posted a net loss for the third quarter of €558m. This compares to a profit of €297m a year ago and is nearly double the losses expected by analysts.
Sales have fallen 29% to€5.61bn when analysts had pencilled in a drop of 13-18%.
Over the first nine months the company made a net loss €3.465bn compared with a profit of €898m over the same period last year, while sales fell to €18.587bn from €21.719bn in 2000.
Alcatel said that over the third quarter the gross margin was stable along most lines of business but substantially lower in the US.
The company said in a statement that its full year net loss will be made worse by over €1.2bn of new provisions to cover restructuring costs which will be booked in full this year.
Chairman Serge Tchuruk said a statement accompanying the results: "Overall we are convinced that Alcatel is poised to weather the current market turbulence.
"With 2001 sales only a few percent off from the 2000 record year, and operating income not far off from breakeven, we have confirmation that our strategic choices, in terms of business portfolio and geographic focus, now including China and Asia Pacific, are paying off."
"Our year-end net debt level should be around €4bn," MrTchuruk said.