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Optical/IP

Lucent Optical Boss Leaves

The chopping is far from done in the optical divisions of Lucent Technologies Inc. (NYSE: LU). Today, more layoffs are underway, and executives are said to be eyeing cuts in more optical product lines.

Earlier this week, Tim Sullivan, president of optical networking at Lucent, resigned, according to Mary Ward, a Lucent spokeswoman. Sullivan had been with the company since 1998. Frank Galuppo, vice president and general manager of optical long-haul solutions, has taken over as the acting president of the optical group.

Sullivan’s departure has helped fuel speculation that Lucent is considering shutting down some, if not all, of its optical operations.

Other news sources point to cuts in its softswitch group. Lucent has publicly stated that it would be considering cuts of every kind. The idea of cutting loose optical and softswitching doesn’t surprise some analysts.

“I believe every product line is on the table for discussion,” says Steven D. Levy, an analyst with Lehman Brothers. “The only ones that are somewhat sacred are CDMA, services, and circuit switches.”

Others say it’s unlikely that Lucent would get rid of its entire optical portfolio, considering the company already has over 45 customers for its DMX product. Company sources say it is also seeing healthy demand for other metro optical products.

The company declined to comment on product cuts, saying it doesn’t comment on speculation or rumor.

Lucent sent out a bevy of pink slips today. These layoffs were part of the already announced headcount reduction that Lucent talked about when it pre-announced its earnings last month, says Ward. No information was available regarding where these job cuts are being done or how many people received notice today. But Ward does say that more cuts are on the way.

“This is all part of the difficult process we must go through to get our headcount down,” she says.

Lucent says it aims to reduce its headcount to 45,000 by the end of the year, down from the 53,000 reported on its last earnings call.

— Marguerite Reardon, Senior Editor, Light Reading
www.lightreading.com
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jamesbond 12/4/2012 | 9:38:18 PM
re: Lucent Optical Boss Leaves what they ought to do --

keep 5-10 sw engineers and 5-10 hw engineers
for each product they have.

for each product keep 1 manager reporting to a SINGLE VP engineering.

keep a few (2-3) good sales folks (ones who do the grunt work not VPs, Directors) per product line.

LAY OFF EVERYBODY ELSE (including directors and VPs).
dietaryfiber 12/4/2012 | 9:38:18 PM
re: Lucent Optical Boss Leaves
I disagree jamesbond....my idea is:

If a product line is not profitable, MD it today and eliminate all the jobs supporting it.

dietary fiber
67scout 12/4/2012 | 9:38:17 PM
re: Lucent Optical Boss Leaves I agree MD everything not profitable, Lucent needs to find a core product to devote all it's energy, and limited resources to. It's a shame most of Lucent's veteren engineering and product support staff are now stocking paint at the Home Depot, and those who are left are to beaten up to really care.
jssreenath 12/4/2012 | 9:38:16 PM
re: Lucent Optical Boss Leaves whats his golden parachute worth? No one takes a high level job at LU with out a multi million dollar exit strategy. Bend over share holders, here it comes again.
jamesbond 12/4/2012 | 9:38:16 PM
re: Lucent Optical Boss Leaves If a product line is not profitable, MD it today and eliminate all the jobs supporting it.
---------------------------

So if the market for the product starts picking
up a year or two from now, they have to start
from scratch. Company has to look further than
"now", while also managing the cost. Only
way to deal with this is just have an engineering
function. Get rid of huge bureuacratic structure.

Belzebutt 12/4/2012 | 9:38:09 PM
re: Lucent Optical Boss Leaves Lucent needs to find a core product to devote all it's energy, and limited resources to.

If they're not making money, logically they have too many resources working for nothing...
optical_juggernaut 12/4/2012 | 9:38:08 PM
re: Lucent Optical Boss Leaves 67scout wrote:

"I agree MD everything not profitable, Lucent needs to find a core product to devote all it's energy, and limited resources to."

LOL - Are you kidding?!? 45,000 employees and they have limited resources? More like limited talent (especially in management ranks).

MrLight 12/4/2012 | 9:38:04 PM
re: Lucent Optical Boss Leaves dietary fiber, your statement that "If a product line is not profitable, MD it today and eliminate all the jobs supporting it." is too black and white.

The MDing of products should only be done if:

1)Identify up front whether the MDing is tactical or straegic. Hopefully it is strategic.
2)The candidate product for MDing is not expected to return to satisfactory profitablity within the next 4 to 5 quarters.
3)The candidate product to be MDed is standalone. Meaning no components are being re-used in another product line that could be adversely affected by the MD.
4)The candidate product can't be further outsourced to reduce its cost, or moved to an off-shore lab for sustaining work, or sold (staff, lab equipment, factory test, WIP etc.)to a suitable company that will sustain the product (which Lucent could get an equity stake in) or sold to employees under an employee buyout.
5)The IP for the candidate product is secured and valued as a separate asset from that of the product.
6)The branding and the brand identity for the candidate product is secured and valued as a separate asset from that of the product.
7)That the users (customers) of the candidate product for MDing are consulted during the MD process. Yes I know this is part of the Class D change notice process, but when you MD a productline it has much more impact than a circuit card.
8)That there is a transition plan to migrate the users of the candidate product to a new Lucent product or in the worst case a competitors product.
9)That the cost of all legal obligations for MDing the candidate product (last buy etc.) have been factored in the cost-benfit analysis of MDing the product using discounted cash flow methodology.

Mr.Light
optical_death 12/4/2012 | 9:38:02 PM
re: Lucent Optical Boss Leaves LU has also mothballed the Stinger DSLAM according to friends at LU...
jimu 12/4/2012 | 9:37:59 PM
re: Lucent Optical Boss Leaves I heard LU in recent months just moved the whole DSL team to the east coast, now they going to shut down the whole thing?
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