Lucent's troubles persist
Lucent’s troubles don’t appear any closer to ending, as it revealed further losses, and expected job cuts of 20,000, as part of seven-point plan to get the company back on its feet.
Lucent’s troubles don’t appear any closer to ending, as it revealed increasing losses and expected job cuts of 20,000, as part of seven-point plan to get the company back on its feet.
According to Lucent’s chairman and CEO, Henry Schact, the plan is to reduce costs and make the company “smaller and leaner” with a focus on optical data networking.
“We can reduce operations by up to $2 billion through reducing the headcount, improving product rationalisation and decreasing discretionary spending," Schact was quoted as saying.
The reduced headcount could see 25-30% of the senior executives lose their jobs. Other cost-cutting exercises will include selling off its optical fibre business, leasing its manufacturing assets and a closed property deal, which should bring in $3.7 billion.
Analysts however, urged Lucent to look at the long-term picture as well, "Lucent is in danger of selling off its assets and ending up with nothing to help it in the long term. This strategy might raise money in the short term but the company needs to focus on revenue from sales for the sake of future health," said Mark Blowers, senior research analyst at Butler Group.