Alcatel-Lucent hacks off an arm for $1.5bn

Alcatel-Lucent has sold off its Genesys division to investment fund Permira for $1.5bn (£952m), but will hang onto its "enterprise" operation as no one seems to want it.

The deal should complete around the end of the year, and will transfer Genesys, which turned over $500m last year by flogging customer-support software, to one of the companies owned by Permira in exchange for $1.5bn in cash. That includes 1,800 staff, and comes with a promise of continued support from Alcatel-Lucent's Enterprise operation.

It had been suggested that Enterprise was also on the block, but the parent apparently "reached the conclusion that retaining it and strengthening it further serves Alcatel-Lucent and our customers".

However, Reuters reports that potential bidders were concerned that the mass redundancies they would want would be difficult to implement given French employment laws, and that Alcatel-Lucent was concerned about the negative publicity such cuts would attract.

Which could be a worry for the 1,800 staff, who'll soon be working for Permira, the private equity investment fund that expects to make a good deal of money out of Genesys. ®