Lucent to revamp management, cut up to 10,000 jobs, analysts say

By Associated Press, 11/9/2000

RENTON, N.J. - Lucent Technologies, stung by a string of disappointing profits, plans to streamline its upper management, enhance employee incentives and eliminate what analysts say could be as much as 10,000 jobs, or 10 percent of its work force.

Bill Price, a spokesman for the telecommunications equipment maker, said yesterday the company has already eliminated 240 finance and human resources jobs this month, but has not determined the total number of cuts companywide. However, he added, ''We have no reason to believe it's going to be at that level.'' He said most of the job losses are expected to come through attrition.

While Lucent wants to shed some positions in optical data networking, software and other areas, the company has established new incentives to hire and keep outstanding employees.

They include giving managers more discretion to hand out perks such as stock options and paying bonuses on a quarterly, rather than yearly, basis.

Dresdner Kleinwort Benson analyst Ariane Mahler said Lucent's ability to maintain a strong work force would improve with the new incentives.

''What matters is how many of the good people do they really keep?'' she said. ''They were at a comparative disadvantage to the rest of the industry.''

Lucent also streamlined its top executive positions to speed decision-making, Price said.

Mahler said the new structure will help the company move much faster. She said Lucent's challenge will be to implement the changes as quickly as possible.

''I think they should accelerate this whole process, because we've been waiting a long time,'' she said.

In addition, Lucent's streamlining effort will include selling off real estate and the power-systems unit and spinning off the microelectronics unit.

The company expects to take a charge in January related to the reorganization, but Price said that figure has not yet been estimated.

Shares of Murray Hill-based Lucent recently hit a two-year low after the company warned for the fourth time this year that profits would not meet expectations.

The company last month reinstated Henry Schacht as interim chairman and chief executive after firing Richard McGinn. Price said the company continues to search for a leader.

This story ran on page C03 of the Boston Globe on 11/9/2000. B) Copyright 2000 Globe Newspaper Company.

http://www.boston.com/dailyglobe2/314/business/Lucent_to_revamp_management_cut_up_to_10_000_jobs_analysts_say+.shtml

-- Martin Thompson (mthom1927@aol.com), November 09, 2000