Lucent to offer early retirement to 10,000
The struggling company will offer early retirement to more than 10,000 managers in its effort to cut costs and buoy its foundering operations.
The action is another in a series of measures that the Murray Hill, N.J.-based company is taking to get itself shipshape again.
Lucent is already in the middle of a restructuring plan, in which 2,000 employees have been let go thus far, and that includes layoffs of 10,000 by July. The 10,000 early retirees are not part of the layoff tally.
"This is part of our effort to accelerate the restructuring plan that we already have in place as we continue on our own and as we focus on the soft marketplace," said Bill Price, a Lucent spokesman.
Lucent will offer early retirement mostly to middle managers and to some nonunion clerical workers June 11, and employees will have until July 10 to accept. Top-level executives will not be eligible for the plan.
"It's another step in them lowering their cost structure, so that's a positive thing," said Steven Levy, an analyst at Lehman Brothers. "We've been critical of them in the past for not moving fast enough in their (restructuring) plan."
Lucent looked for other avenues out of its current mess. It recently terminated merger talks with France's Alcatel that would have formed a global telecommunications equipment juggernaut.
The former subsidiary of AT&T has been in a downward spiral after a series of missteps over the past few years.
Lucent reported a loss of about $3.7 billion including charges for its second fiscal quarter, ended in March. Revenue fell to $5.9 billion, down 17 percent from last year.
Lucent spun off Agere Systems, its chips and components subsidiary, in an initial public offering last March and is looking for buyers for its fiber optic cable unit.
For workers who accept the early retirement offer, Lucent will add five years to their term of service and five years to their age. Under current rules, only employees with either 15 years of service or 50 years of age are eligible for pensions.
The new incentives send employees off with a better benefit package and, in some cases, make some workers eligible for pension when they otherwise would not be.