Lucent posts Q3 loss, plans 7,000 more layoffs

Lucent posts Q3 loss, plans 7,000 more layoffs

Lucent Technologies has posted its ninth consecutive quarterly loss and said it would lay off another 7,000 people in an increased effort to curtail costs.

The telecommunications equipment maker reported a net loss of $US7.91 billion for its third fiscal quarter of 2002, to June 30, compared with a $3.24 billion net loss in the same period a year ago. Lucent took a non-cash charge related to deferred tax assets of $5.83 billion, a spokesman said.

Revenue for the quarter plunged 50 per cent to $2.95 billion from $5.89 billion in the year-ago period. Spending constraints among phone companies, Lucent's main clientele, have intensified and remained in place longer than anybody had expected, Lucent CEO Patricia Russo said.

The international market, especially Europe, proved toughest for Lucent, with pro forma revenue outside the US down 52 per cent year-on-year while US revenue fell 42 per cent. On a sequential basis, pro forma revenues dropped 15 per cent in the US and 18 per cent outside the US, Lucent said.

Split up by product portfolio, Lucent said revenue from its fixed-line network hardware business tumbled 61 per cent year-on-year and 21 per cent sequentially. Revenue from the mobile phone infrastructure decreased 2 per cent compared with last year and 8 per cent from last quarter.

Lucent, which started a restructuring program in January 2001 and employed 53,000 people as of June 30, said it would eliminate another 7,000 jobs because of "continuing market declines". The company said it is preparing "further actions" so it can reach break-even on revenue below $3.5 billion, which could mean even more cuts.

"We expect to come out at about 45,000 people by the end of the year," said Lucent chief financial officer Frank D'Amelio.

Lucent employed 106,000 people on January 1, 2001. About 10,500 people were laid off in a first round of restructuring and another 26,600 in following rounds. The employee count was also reduced as Lucent outsourced manufacturing and sold business units, D'Amelio said.

Lucent did not provide guidance for its fourth quarter because of "ongoing market uncertainty", but said it still plans to be profitable late in its 2003 financial year, which begins in October.

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