The cuts will be made in the Business Communications Systems (BCS) unit, which supplies companies with office phone equipment and software. Lucent plans to eliminate 1,200 jobs across the United States by asking employees to resign and firing 200 managers responsible for them. It's also firing 240 people in Tucson, Arizona, and 40 in Silver Spring, Maryland.
In its biggest job reduction since being spun off from AT&T, Lucent is slashing costs at a unit that's dragging down its revenue growth. While its total revenue rose 23 percent in the fourth quarter ended September 30, the unit's sales were unchanged.
"They're right to be focusing on the parts of the business where the performance is disappointing," said Sanford C. Bernstein analyst Paul Sagawa, who rates Lucent "outperform." "They know BCS is going to be a drag on growth for the foreseeable future."
BCS has a staff of 35,000 worldwide. Lucent employs a total of 153,000.
Lucent is making the cuts because it no longer needs employees to perform certain jobs, spokesman Bill Price said. It's offering the resignations from today until November 30 and doesn't expect to take a charge to cover the job reductions.
Incentives
Communications Workers of America spokesman Jeff Miller said Lucent told
union officials that it's
making the cuts to save $300 million in costs a year. Price declined to
say how much the company
expects to save.
"We're looking at ways to run the operation as efficiently as possible," Price said. "We expect that number of people to be off the payroll by the end of the year."
Lucent will no longer install wiring for small businesses and is doing more diagnostic work remotely to cut down on site visits. It hopes to find at least 1,200 technicians now employed in those businesses who are willing to resign in exchange for as much as 104 weeks of severance pay. Most are eligible for pensions.
Most of the technicians are concentrated in New York, Atlanta, Chicago, Denver, Los Angeles, and San Francisco.
The employees in Arizona and Maryland are losing their jobs as Lucent moves some billing and ordering functions for large business customers to Atlanta, Oklahoma City, and Parsippany, New Jersey. They'll be able to apply for other jobs at Lucent.
BCS had fourth-quarter sales of $2.47 billion, almost a quarter of total revenue at Murray Hill, New Jersey-based Lucent.
Lucent cut 80 positions in communications software in July and gave another 180 employees offers to resign in September. Those cuts were unrelated to its plan to cut 1,680 jobs.
Lucent shares were down 0.69 to 64.31 in early trading.
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