Lucent forced to cut more jobs in restructuring

Lucent Technologies will be issuing additional pinks slips after the Murray Hill, N.J.-based company announced a more aggressive restructuring plan on Friday in an effort to become profitable next year.

The company said it anticipates an additional 10,000 job cuts, bringing its total number of employees down to 35,000 by the end of fiscal 2003. Lucent had previously announced it would reduce its workforce down to 45,000 employees by the end of calendar year 2002.

Frank Briamonte, a Murray Hill, N.J.-based spokesperson for Lucent, would not speculate on where the job cuts would come from. The company said it will provide further details on its restructuring when it announces earnings on Oct. 23. Information on how the announcement will affect Lucent employee numbers in Canada was not available.

“In light of our revised forecasts for fiscal 2003 and our new breakeven plan developed in the last few weeks, we re-evaluated several balance sheet items, including inventory,” said Frank D’Amelio, Murray Hill, N.J.-based chief financial officer at Lucent, in a statement. “In addition, the company will record a restructuring charge of approximately US$1 billion.”

Lucent has also terminated its US$1.5 billion credit facility and its US$500 million accounts receivable securitization vehicle to avoid possible default on the financial covenants.

The company will also record a charge to equity of about US$3 billion for a decline in pension assets in its management pension plan, mainly because of a drop in the equity markets. These additional charges will help to increase Lucent’s per share loss in the fourth quarter, which could increase by up to US$0.20 over the previously projected US$0.45 a share loss, D’Amelio said.

Despite these financial difficulties, D’Amelio said Lucent still has the liquidity to fund its operations, and the company expects to have US$2 billion in cash at the end of fiscal 2003.

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