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Lucatel Staff Face Wage Worries

Staff at soon-to-be-wed vendors Alcatel (NYSE: ALA; Paris: CGEP:PA) and Lucent Technologies Inc. (NYSE: LU) face the prospect of having their salaries and benefits cut in 2008, a document filed with the Securities and Exchange Commission (SEC) revealed today. (See Alcatel, Lucent Seal Deal.)

Staff have been told that their salaries and employee benefits are safe post-merger, but only until the end of 2007. The document -- a transcript of an employee/management question-and-answer session about the impact of the merger -- notes that: "The merger agreement provides that the combined company will maintain the salaries and aggregate employee benefit levels (other than benefits under equity-based plans) provided to Lucent and Alcatel employees immediately before the merger at least through December 31, 2007."

Ominously, though, the official response adds: "We are unable to speculate on what might happen further down the road."

With the merger -- creating a monster vendor we're calling "Lucatel" until an official name is revealed -- set to complete any time between October 2006 and April 2007, staff retained by the new giant will have a maximum of 15 months' wages and benefits security. (See Lucatel: Full Steam Ahead.)

The Q&A session also reveals that the combined company will "maintain all of Lucent's and Alcatel's severance plans, programs, and policies for at least two years after the merger, other than for those employees whose employment is governed by a collective bargaining or similar agreement."

The new revelations will create additional pressure particularly for Lucent staff, who are already concerned that they will bear the brunt of the planned 8,800 redundancies. Between them, Alcatel and Lucent have about 88,000 employees, and they expect the merger to result in a 10 percent headcount reduction. (See Lucatel: French Staff Not Safe and Alcatel/Lucent: No Job Cut Clarity Yet.)

— Ray Le Maistre, International News Editor, Light Reading

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routerbox 12/5/2012 | 3:49:28 AM
re: Lucatel Staff Face Wage Worries I interact some bit with my team in India and i hear about all the new people joining our company. It seems the maximum attrition is from Lucent and the erstwhile Riverstone Networks (which has just recently been acquired by Lucent). The reasons are aplenty: Salaries have not been hiked for the folks working in Riverstone. Lucent, the salaries were never good. Then there is this sword of damocles hanging over Riverstone guys, as there is this talk with the Alcatel and a fear that these guys are gonna loose their jobs (I call it the Timetra fear syndrome).

Needless to say this is turning out to be very good for other companies in Bangalore, where hunting for good people is always a difficult task.

Cheers to Lucatel! :)
CoolLightGeek 12/5/2012 | 3:49:26 AM
re: Lucatel Staff Face Wage Worries Ray,
"... will maintain the salaries and aggregate employee benefit levels (other than benefits under equity-based plans) provided to ... employees ... at least through December 31, 2007."

Just curious what other companies currently have any written guarentee for their salaries and benefits through the end of 2007 (or at least past the end of current business day)?
Can you provide a list?

Also, would you please you provide a comparision of this clause to other merger filings in the industry?

Just looking for balance,
CLG

stupid_writer 12/5/2012 | 3:49:21 AM
re: Lucatel Staff Face Wage Worries * most of the good ppl even in india have left the
is it so ? that might be case for banaglore boom, seems like sinking ship even lucatel put more weigth on it to sink in less time

*alas their was not even a little try to stop those ppl from management, they find travelling more important, lol :-).
if this is case, poor riverstone guys are really in trouble, either mgmt want to name it "Self Layoff" remember 10% cut in lucatel, this is how they are going to save pink sheet salary (money matter finally)


no_idea 12/5/2012 | 3:49:21 AM
re: Lucatel Staff Face Wage Worries It used to be a great company to work for. most of the good ppl even in india have left the company and joined C or J or startups. alas their was not even a little try to stop those ppl from management, they find travelling more important, lol :-). now most of the ppl who are still hanging are of these types:
a. they didn' get thru the interviews tech/HR(money matters).
b. they didn't try due to these personal reasons:
i. they can easily butter the foolish management and make more money ;-). believe me it's happening.
ii. they have already made fool of the management and are sure not to get offer more than what they are making at lucent-rstn.
iii. really busy in their personal lives and don't have time to think abt a change.
no_idea 12/5/2012 | 3:49:20 AM
re: Lucatel Staff Face Wage Worries aefef
startup_shutup 12/5/2012 | 3:49:19 AM
re: Lucatel Staff Face Wage Worries Salary cut is good since inflation is out of control.

US interest rate should raise to 8% -- enough with home equity cashout -- go do something useful for society ....
Michael Harris 12/5/2012 | 3:49:18 AM
re: Lucatel Staff Face Wage Worries "really busy in their personal lives"

Having a personal life certainly diminishes professional competence. All non-work interests, like family, should be curtailed. Wasn't that also in the Lucatel filing? ;)

CoolLightGeek 12/5/2012 | 3:49:18 AM
re: Lucatel Staff Face Wage Worries Michael Harris,

MH: " All non-work interests, like family, should be curtailed. Wasn't that also in the Lucatel filing? ;)
"

Instead of the LR staff continuing to sling mud at Lucatel at attempts of biting humor, why don't you guys offer some balance and do proud by your favorite journalism instructor?

For example, how long is your salary base at LR guarenteed for? What are the equivalent clauses in other big multinational mergers? Too lazy or just not interested?

CLG
OldPOTS 12/5/2012 | 3:49:17 AM
re: Lucatel Staff Face Wage Worries "... will maintain the salaries and aggregate employee benefit levels (other than benefits under equity-based plans) provided to ... employees ... at least through December 31, 2007."

Does that mean they can anticipate raises in 2008?
Just wundering.

OP
brahmos 12/5/2012 | 3:49:16 AM
re: Lucatel Staff Face Wage Worries LU blore may not have payed well to all, but there are a set of managers with very fat salaries for long now. C Blore has a "in circle" that has a lock on all creative decision making and interfacing with san jose (travel, meetings) - after 10 yrs they dont even have a charter to develop a product for emerging markets. good people are/were there but sidelined/chased out by the butter people. strategy seems to be hiring ever growing army of people and asking san jose for bits and pieces of work. they will hire atleast 1000 more to fillup new campus. hiring standards are poor.
so jobs are certainly there but a "good" job sure takes a lot of searching.
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