Lucent to cut 10,000 jobs
The telecommunications equipment maker, which expects to report a wider-than-expected loss in the fourth quarter, said the layoffs will reduce its total work force to 35,000.
The new layoffs will reduce the total work force to 35,000 people, the company said. Lucent, a former highflier, has been hit hard by the decline in spending by telecommunications carriers. It has been forced to undergo massive layoffs, has repeatedly cut its earnings targets and has flirted with delisting from the New York Stock Exchange.
The telecom equipment maker previously said it expected to report a loss of around 45 cents per share for the fourth quarter, which it's scheduled to post Oct. 23. It now sees that loss coming in as high as 65 cents per share.
Lucent attributed the dip to new restructuring moves designed to help the company reach a break-even revenue level of $2.5 billion per quarter. The company also expects to record a $1 billion restructuring charge in the fourth quarter and take an additional charge about $3 billion because of a decline in its pension assets.
"Based on conversations with our customers, we are tightly focusing our investments on the nearest and clearest market opportunities that will help them expand their existing networks and offer next-generation services," CEO Patricia Russo said in a release.
The company recently said that revenue in the fourth quarter would drop 20 percent to 25 percent from the $2.95 billion posted in the third quarter.
On a conference call, Russo expressed some hope that the worst is over.
"We are not planning and have no discussion or insight that we will see in (fiscal 2003) the kind of decline we saw in (fiscal 2002)," he said.
Lucent said it was canceling a $1.5 billion credit facility, which was scheduled to expire in February 2003. The company said it risked defaulting on the terms of the credit agreement. Lucent, which has $4.4 billion in cash, never used the credit.
In related news, telecom equipment maker Nortel Networks said Friday that third-quarter revenue will be about $2.36 billion, in line with earlier predictions.
Nortel also said it is working to achieve a quarterly break-even revenue level of $2.4 billion. It expects to achieve that goal in the second quarter of 2003. Nortel will formally report third-quarter results on Oct. 17.