Publish date:

Chop Chop: Lucent Tells Staffers More Cuts Are Coming

About 8,500 employees opted for the retirement package; the next round of cuts is expected to exceed 10,000.



employees: Not enough of you are leaving voluntarily, so more of you will be leaving involuntarily.

The telecommunications equipment maker said Thursday that 8,500 employees opted to take its early retirement package and leave the company. It was widely believed that Lucent had hoped to lure 10,000 or more employees to the voluntary plan as part of an

effort to reduce the total staff size to 62,000 from 104,000.

Lucent's CEO Henry Schacht told employees Thursday that another round of cuts will be necessary. The company is working on an exact number it will need to cut in the second round and is expected to announce that plan sometime between now and the end of the quarter in September. It is believed that the next round will exceed 10,000 employees.

Lucent, which has been mired in mismanagement, misbooked sales and missed financial targets, is also attempting to adjust to a sharp falloff in sales as phone and Internet companies slash spending on new networking gear. Nearly every communications technology company -- from


(CSCO) - Get Cisco Systems, Inc. Report


TheStreet Recommends






, to name a few -- have been trimming costs and staff to try to bring expenses in line with falling sales.

The early retirement offer, complete with full benefits, was expected to be tempting enough to prevent Lucent from having to initiate another round of 10,000-plus firings. In January, Lucent announced it was cutting 10,000 employees as part of its ongoing restructuring plan.

In a statement, Lucent said "we are well on target with our previously announced workforce reductions." Lucent says all 10,000 employees in that first round are now off the payroll.

In total, Lucent's cuts -- 10,000 in the first round, 12,000 related to the eventual sale of the fiber-cable business, 8,500 through early retirement and a 10,000-plus second-round cut -- will bring Lucent's total employee count close to the 62,000 to 64,000 range. Notably, rival Nortel has the same head-count targeted.

Lucent shares had been trading up all morning prior to the announcement. Around 12:40 p.m., the stock was up 65 cents, or 11%, to $6.71.

Lucent executives are expected to address the layoffs and give investors an update on the restructuring during its earnings call July 24.