Lucent's Russo Fights Back

Lucent Technologies Inc. (NYSE: LU) has strongly rebutted a Light Reading news article saying that Lucent's staff reductions and product portfolio continues to be trimmed.

The long memo from Lucent chairman and CEO Pat Russo, published this week in an internal Lucent newsletter, was in response to an article published on Monday about more layoffs coming at Lucent, and a possible reduction – and possibility of elimination – of the staff supporting its CBX 3500 and CBX 500 multiservice switching products (see Lucent Cuts Target INS).

In short, Russo is fighting the labeling of layoffs as "restructuring" and denying that Lucent has any plans to cut its CBX 3500 product line.

Below is the full text of the memo Russo wrote to Lucent employees. Light Reading has confirmed the authenticity of this memo, which ran in a company newsletter, through multiple Lucent sources.

    "[NOTE TO LUCENT EMPLOYEES – This story concerns me because it is inaccurate and I want to make sure we're on the same page regarding the issues it raises. First, our restructuring is behind us – that means the plans we put in place and announced when we announced our restructuring charges are in fact complete. We have always said that we would manage the business based upon the realities of the market, which means there will be additions in some areas and reductions in other areas of the business. In fact the reductions referred to in the story were tied to the circuit switching business – a business that while very important is a business in decline and as a result needs fewer people. It's important that everyone understand that we will continue to add and reduce headcount based on the needs of the business and market dynamics. I've said that on employee broadcasts and most recently I said it last Tuesday on CNBC. This is how we must run the business going forward.

    Finally, it's misleading and incorrect to speculate that we are backing away from the CBX 3500. It is a key piece of our portfolio going forward based on the opportunities we see in the market and conversations we are having with our customers. This product is targeted at customers who are enhancing their edge networks to support profitable Frame Relay and ATM services as well as new Ethernet and IP/MPLS services. Our partnership with Juniper Networks lets us sell their edge routers to carriers who are tuning their networks primarily to support IP services. There's room for both products in our portfolio because they address different customer needs to evolve edge networks to suit their different business models. – Pat Russo]"

Light Reading has since obtained more details about Lucent's staffing plans, and an update has been published as Lucent Offshoring Wave Hits Hard.

— R. Scott Raynovich, US Editor, Light Reading

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