January 24, 2001, 12:30 PM — BOSTON -- Lucent Technologies Inc. bundled its plan to restructure the company with its report of a $1.02 billion first quarter loss. The restructuring will result in the loss of 10,000 jobs, the company announced Wednesday.
The telecommunications equipment maker reported the pro forma loss for its first fiscal quarter ending Dec. 31, 2000, which also translates into a loss of $0.30 cents per share. That compares to an earnings profit for the same period last year of $1.08 billion or $0.33 cents per share, the company said.
Lucent's Q1 report is $0.03 off of the consensus projection of 22 analysts of a loss of $0.27 per share, according to First Call/Thomson Financial.
The restructuring plan, which is intended to slash $2 billion in costs, will bring lay-offs representing about 8 percent of its work force, pegged at around 126,000. Lucent will be taking a one-time restructuring charge of up to $1.6 billion in its second fiscal quarter, the company said.
Pro forma revenue from continuing operations also took a hit, with Lucent reporting Q1 revenue of $5.84 billion for the first fiscal quarter of 2001, down 26 percent from $7.91 billion in Q1 last year, Lucent said.
The company hopes to improve its working capital with job cuts, the elimination of product lines and associated write downs, said Henry Schacht, Lucent's chairman and chief executive officer, during a conference call on Wednesday. He emphasized Lucent's need to perform in order to dig out of its financial hole, and said that hiring will continue in its high-growth areas. "This is a transition year for Lucent," he said. The "vast majority" of people losing their jobs at Lucent will be notified by February 15, and all will be notified by early March, he added. "We will eliminate as many jobs as possible by attrition."
In addition to the 10,000 employees who will lose their jobs, another 6,000 employees at Lucent's manufacturing facilities in Columbus, Ohio and Oklahoma City will move outside the company when Lucent sells the facilities to outsource manufacturing, executives said. Wednesday's announcement also excludes the upcoming spin-off of its Agere microelectronics unit, which has about 16,000 employees.
"Lucent's problem in life has always been its overhead, and this is a direct shot at its overhead," said Frank Dzubeck, president of Communications Network Architects Inc. He said the changes that will be necessary, like automating the company's supply chain management and streamlining production, are significant and will take time, a sentiment jibing with the company's assertion that the financial effects of the restructuring won't help Lucent's bottom line until the second half of the fiscal year.