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Lucent Speeding Up Turnaround Efforts

June 06, 2001|BEN KLAYMAN | REUTERS

ATLANTA — Lucent Technologies Inc.'s chairman said Tuesday that the troubled telecom equipment maker is speeding up its turnaround efforts, which a source close to the plans said includes buyout packages aimed at cutting several thousand more employees.

The next phase of the turnaround will include more cost reductions, product cuts, financing issues and possible plant sales, Chairman Henry Schacht said at the Supercomm 2001 technology conference.

He declined to say whether more jobs would be cut in addition to the 16,000 already targeted, but said it would be more of the same approach announced in January. However, the source said Lucent intends to offer a retirement package over the next several days aimed at cutting several thousand mid-level managers.

The Murray Hill, N.J.-based company said in January that it would cut 10,000 jobs and shift an additional 6,000 to outside contract manufacturers, reducing its work force by about 15% to about 90,000. The buyouts would further boost the company's employee reduction plans, something called for by many analysts and portfolio managers.

Lucent, which recently ended merger talks with French rival Alcatel, has accelerated its turnaround plan by moving forward several projects that had not been planned until its 2002 fiscal year, Schacht told reporters.

While Schacht declined to discuss details of the failed talks with Alcatel, he said Lucent will not seek other mergers.

"We are on our own, and that's fine," Schacht said.

He said that Lucent expects fiscal third-quarter sales to be modestly higher than the second quarter's $5.92 billion despite continuing market weakness, and that it expects to show improvement from the loss of 37 cents a share recorded in the second quarter. Wall Street analysts on average expect Lucent to post a third-quarter loss of 21 cents.

Schacht said the plan will be presented in full detail in July. "This is not rocket science here, and there is no silver bullet, and you shouldn't look for any," he said.

Lucent shares rose 49 cents to close at $8.49, after rising as high as $8.81, on the New York Stock Exchange.

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