Lucent announces more losses and job cuts

Telecommunications equipment maker, Lucent Technologies has announced its ninth straight loss-making quarter as well as 7000 worldwide job cuts.

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By  Neil Denslow Published  July 23, 2002

Lucent Technologies has announced its ninth straight loss-making quarter as well as 7000 worldwide job cuts.

The telecommunications equipment maker posted a net loss of US$7.91 billion, which included a non-cash charge of US$5.83 billion. This charge was caused by an accounting rule regarding deferred tax assets at June 30th. Such assets, which can result from net operating losses, cut future taxable income.

“A charge of $5.8 billion is absolutely staggering, regardless of why it’s being taken,” Tom Lauria, an independent telecom analyst, told Reuters.

“There’s no reason to believe right now from these results that the (telecom) industry has stabilised,” he added. “Telecom remains extremely speculative and based on this I see no reason for investors to move into the space.”

Lucent’s CEO, Patricia Russo admitted in a statement that “the market continues to be very challenging. Capital spending constraints have intensified and remained in place much longer than anyone would have predicted,” she added.

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