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Lucent to lay off 30% of senior managers

Ex-workers go postal with bomb threats

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Beleaguered telecoms manufacturer Lucent has said it will lay off three in 10 of its top managers as part of a wide ranging restructuring program designed to cut its operating expenses.

The firm plans to split into two main businesses - landline and wireless - both of which will focus on selling network infrastructure kit to service providers. Last year the firm had 11 divisions.

The collapse of competitive carriers in the States, who had centres full of part-paid Cisco and Lucent kit plumbed in, has had a monstrous effect of those former darlings of Wall Street, while a slowdown in IT spending in general has piled on the misery. In May, Lucent abandoned plans to Merge with Alcatel and the fallout from the failure to conclude that deal has hardly helped matters either.

Lucent recorded £3.69 billion in losses on declining sales during its second quarter.

Earlier this year Lucent announced that it would shed 10,000 jobs in order to cut costs and reorganise itself in order to bring its business back on track. Lucent early retirement offer, which aimed to take a further 5,000 from the payroll, closed yesterday and the signs are the firm is preparing for more compulsory job losses throughout the firm.

Touchy-feely memos from Lucent chairman Henry Schacht notwithstanding, morale at Lucent seems to be at rock bottom, and there are even reports that staffers who are losing their jobs are resorting to violence in order to express their grievances.

Reuters reports that Lucent called in a police SWAT team to a Massachusetts plant after a member of staff reported that a former employee, dressed in a black trench coat and carrying a duffel bag, threatened his former colleagues.

The incident isn't just a one off either. In April, a technician threatened to blow up Lucent's North Andover plant with a lorry loaded with a fertiliser bomb after Lucent announced layoffs at the Massachusetts facility.

Lucent has an outstanding track record for innovation but a series of poor business decisions and a long string of damaging incidents have brought what was last year a thriving business to the brink of bankruptcy. Securities and Exchange Commission accounting probes and allegations that workers had sold hi-tech secrets to the Chinese have turned Lucent into a tragi-comedy figure.

The success of Lucent's restructuring program and a resumption in networking investment by service providers will both be needed if the firm is to turn its business around. Divine intervention wouldn't go amiss either. ®

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