Lucent Technologies, the world's biggest manufacturer of telecommunications equipment, yesterday announced it would let go 10,000 employees, 10 per cent of its worldwide work force, in a restructuring plan after posting a loss of $1.02 billion (#1.09 billion), or 30 US cents a share, in its fiscal first quarter to the end of December last. About three-quarters of the job losses will be in the United States with the remaining 2,500 spread over Lucent operations in Europe, the Middle East, Africa, Asia and the Pacific Rim, according to a spokesperson for the company.
Lucent has between 900 and 1,000 of its 106,500 employees worldwide in Ireland, all in the Dublin area - at Ballsbridge, Blanchardstown, Cherrywood and St Stephen's Green.
No decision has been announced about cutbacks in Ireland but the situation would be reviewed in the coming days, a spokesperson said. The spokesperson pointed out that Lucent was continuing to recruit for its Blanchardstown operation. This site has the company's largest service providers' network division and the size of the facility is being doubled due to Lucent winning the business of manufacturing optical and data networking products. The job cuts would primarily reduce duplicated marketing, sales and administrative jobs, Lucent said. Workers would still be hired in high growth areas of its business.
Shares in Lucent rose in early trading on news of the restructuring plan, which is designed to reduce expenses by $2 billion and recover from recent profit shortfalls and product development missteps. Lucent is one of the most widely held shares in the US. The restructuring plan includes the elimination of some product lines and the writedown of some assets. Lucent's loss of $1.02 billion in its first quarter compared with a profit of $1.08 billion, or 33 US cents a share, in the same period a year ago. The loss was greater than Wall Street's already reduced expectations which foresaw a loss of 27 US cents a share.
Sales in the quarter fell 26 per cent to $5.84 billion.
The company said it would take a charge in the second quarter of $1.2 billion to $1.6 billion to cover a restructuring plan.
Lucent cut its growth outlook several times last year as it fell behind in the key optical networking market. Former Lucent chairman and chief executive Mr Richard McGinn was forced to leave in October after Lucent's stock fell 60 per cent in the previous 12 months.
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