More details..Lucent to Cut 1,680 Jobs From Business Communications
Unit to Trim Costs
By Erik Schatzker
Lucent to Cut 1,680 Workers From Business Sales Unit
(Update2)
Murray Hill, New Jersey, Nov. 1 (Bloomberg) -- Lucent
Technologies Inc., the world's No. 1 phone-equipment maker,
plans
to cut 1,680 jobs, or about 1 percent of its workforce, to reduce
costs at the unit responsible for sales to businesses.
The cuts will be made in the Business Communications Systems
unit, which supplies companies with office-phone equipment and
software. Lucent plans to eliminate 1,200 jobs across the U.S.
by
asking employees to resign, and to fire 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
Corp., 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 Sept. 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 & Co. analyst Paul Sagawa, who rates Lucent
''outperform.'' ''They know BCS is going to be a drag on growth
for the foreseeable future.''
Business Communications Systems 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 Nov. 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 no longer will 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
company expects to fire 200 managers who oversee them.
The employees in Arizona and Maryland are losing their jobs
as Lucent moves some billing and ordering for large business
customers to Atlanta, Oklahoma City and Parsippany, New
Jersey.
They'll be able to apply for other jobs at Lucent.
Business Communications Systems 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 rose 3/4 to 65.
Sounds good to me.. Management is doing their job well..
BR |
