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Lucent Cleans Up Core Routing

Light Reading
News Analysis
Light Reading
8/10/2000

After a year-long internal battle to integrate Nexabit Networks into the company fold, Lucent Technologies Inc. (NYSE:LU) may now finally be putting to rest the turmoil in its core routing division, based in Marlborough, Mass.

As expected, a vesting date for former Nexabit employees has resulted in a major exodus of employees from Lucent's core routing division, reducing the headcount from 227 to 180 (see Lucent Faces "Exodus of Nexabit Staff"), according to several sources. Of those people that have left, it's estimated that 30 to 40 of them have moved in across the street to Axiowave, the company founded by former Lucent core routing executive and Nexabit founder and CEO Mukesh Chatter, who left Lucent in May (see Chatter's New Box). But the worst may be over, and several sources, including former Nexabit employees, suggested it may now be better that Lucent has purged itself of malcontents.

The exodus started on July 19, the anniversary of the Nexabit acquisition, at which time Nexabit employees received an accelerated two years in vesting. Then on August 1, Lucent accelerated the rest of the vesting for Nexabit employees, perhaps to get rid of the wafflers and get on with business. Now everyone is completely vested.

Hilton Nicholson, the VP and general manager of core routing who replaced Chatter, looks to be carrying out mop-up duty. Lucent has moved in engineers from other divisions and is working hard to recruit outside the company as well, says Andrew Bronson, VP of marketing for the core routing marketing group of Lucent. Also, in order to help retain the engineers, the company is offering a bonus equal to 50 percent of salary for those working through to the completion of the 1.6 version of software, which will offer the extended quality of service (QOS) features promised in the original product (see Lucent Quiets Terabit Router Rumors), according to sources familiar with the project.

With key engineers missing, it won't be an easy task to complete. But if Nicholson succeeds in retaining the workforce he needs, it looks like Lucent may have the upgrade ready by the end of the year.

-- Marguerite Reardon, senior editor, and R. Scott Raynovich, executive editor, Light Reading, http://www.lightreading.com

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