Lucent Technologies suffered another setback when credit rating agency Standard & Poors reduced the company's credit rating to junk bond status.
The change means it will cost the telecoms supplier, which employs 700 people in Ireland, more money to raise cash for future needs. Shares of Lucent closed at $7.94, down 10 cents, on the New York Stock Exchange yesterday.
Standard & Poors said the reduction reflects significant uncertainties about the company's ability to continue to improve its operating profitability and cash flows to anticipated levels.
After rapid expansion following its 1996 spinoff from AT&T, Lucent shocked analysts in fall 1999 with the first of several warnings it would miss its earnings targets.
That was partly because competitor Nortel Networks had beaten it to market with faster optical telecommunications equipment, costing Lucent market share.
Last week, Lucent announced it was offering voluntary retirement buyouts to over 10,000 employees in the United States to accelerate its restructuring.
Earlier this year, Lucent announced plans to eliminate 10,000 other jobs as part of the restructuring and to remove another 6,000 from its payroll through the sale of factory operations. About 2,000 had been cut as of the end of March, leaving about 104,000 employees worldwide.
PA
