Lucent reorganizes to revitalize sales

The telecommunications equipment maker forms two main product divisions, part of the struggling company's effort to revitalize sales.

2 min read
Lucent Technologies on Tuesday reorganized into two main product divisions, part of the struggling company's effort to revitalize sales.

The telecommunications equipment maker said it is dividing its product family into two new divisions: one focusing on wireless equipment, and the other for its traditional networking equipment and software.

Lucent's new Integrated Network Solutions unit will combine its optical networking equipment with its data and switching equipment. The technology is used by telecommunications service providers to transport Internet traffic at high speeds. The company had previously merged its data and switching units in May.

The company's new Mobility Solutions unit houses all of Lucent's wireless technology, such as its equipment to build third-generation "3G" wireless networks for service providers.

"It's basically a realignment to reflect a more lean, nimble and more customer-focused Lucent as we go forward," a Lucent spokesman said.

Lucent's announcement Tuesday is just the latest in a series of moves by the struggling company to reorganize. After a series of financial gaffes last year, Lucent executives have spent the past nine months performing a massive makeover of a company that was once a darling of Wall Street. Lucent was in merger talks with Alcatel before calling off the deal in late May.

Like rivals Cisco Systems and Nortel Networks, Lucent has struggled because of the economic slowdown and less spending by service providers. But some of Lucent's woes have also been self-inflicted. For example, the company last year was too slow to respond to the need for higher-speed optical equipment, allowing Nortel to take the lead in the market. The company was also hurt by loans to emerging service providers that couldn't pay their bills.

The company's restructuring efforts have included executive changes, the layoff of about 10,000 employees, and the outsourcing of its manufacturing of products to outside companies.

A Lucent spokesman on Tuesday said the company also will revamp its sales organization to better align with the two new product divisions. Lucent executives gave news of the latest restructuring to employees in an internal memo Tuesday.

Analysts said Lucent's latest changes are positive.

"Anything that refocuses is a good thing," said Lehman Brothers analyst Steven Levy. "Once you get management focused, it should help get products out on a timely basis. Now you have accountability. (Chief Executive Henry Schacht) can look at two people and say, 'you are responsible.'"

Jim Brewington, who previously ran Lucent's wireless unit, will continue to run the company's new Mobility Solutions unit. Janet Davidson, who previously ran the company's data and switching unit, will run the new Integrated Network Solutions unit. Jeong Kim, who headed up the company's optical networking group since August, will leave the company, the spokesman said.