DroppingLucent is preparing to drop product lines and cut its total staff by an additional 25% below targeted levels, eventually bringing total staff to between 30,000 and 35,000 workers, according to people familiar with the company. The cuts would leave Lucent at a quarter of its size when it was spun out from AT&T ( T) some six years ago. The latest plans continue an effort the company started a year ago, when it vowed to focus on its best biggest buyers and cut all unprofitable customers, countries, products and research centers. A number of prized projects and divisions are expected to feel the pinch, including parts of its fabled Bell Labs, some of its highly engineered optical efforts including its LambdaRouter switch and certain areas of data communications and network access lines. Many of these areas were previously thought to hold the keys to Lucent's future growth.
Sacred CowsThe latest reduction will sacrifice a sizable portion of the company's top-line performance, say people familiar with the plans. With the loss of several unpopular and unprofitable products, Lucent's total sales will likely drop to a range between $9 billion and $11 billion annually, or $2.5 billion per quarter, these people say.
As goes revenue, so goes the staff
|*Revenue figures are quarterly |
**Sept. '01 and Dec.' 01 numbers are estimates.
****3rd and 4th quarter figures are analysts estimates