October 3, 2002
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
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