Lucent to Cut 10,000 Jobs
Lucent Technologies posted today a first-quarter loss and said it would cut 10,000 jobs, or 10 percent of its work force, as part of a plan to reduce expenses by $2 billion and recover from recent profit shortfalls and product development missteps.
It said it would take a charge in the second quarter of $1.2 billion to $1.6 billion to cover a restructuring plan that will include the job cuts, as well as the elimination of some product lines and the write-down of some assets.
Lucent, the world's largest telecommunications equipment maker, said it lost $1.02 billion, or 30 cents a share, in its fiscal first quarter, ended Dec. 31, compared with a profit of $1.08 billion, or 33 cents a share, a year ago.
The loss was deeper than Wall Street's already reduced expectations of a loss of 27 cents a share, according to research firm First Call/Thomson Financial.
Its quarterly pro forma revenues from continuing operations fell 26 percent to $5.84 billion.
Lucent slashed its growth outlook several times last year as it fell behind rivals in the key optical networking market, and struggled with manufacturing constraints and declining demand for its core telephone equipment products.
The turmoil, which led to the ouster of Lucent Chairman and Chief Executive Richard McGinn in October, dragged Lucent's stock down 60 percent over the past year.
The job cuts, which were widely expected, will primarily reduce duplicated marketing, sales and administrative jobs, Lucent said, adding that it will continue to hire workers in high growth areas of its business. The company has about 106,500 workers, excluding 16,500 workers from its Agere Systems microelectronics unit, which will be spun off.
As part of the restructuring, Lucent said it will reduce capital spending by $400 million by the end of the fiscal year. It also will significantly expand its previously announced plans to use contract manufacturers, which will result in about 6,000 fewer positions by the end of the fiscal year.
To ensure that its cash flow needs are adequately met, Lucent said it got a new $4.5 billion credit facility arranged by J.P. Morgan and Salomon Smith Barney. BACK TO TOP
Chevron Smashes Expectations
Cheron, the No. 2 U.S. oil company, said today fourth-quarter earnings rose 88 percent, easily surpassing Wall Street expectations, driven by sharply higher oil and natural gas prices, a modest rise in production volumes and better refining and marketing results.
Chevron, which is acquiring rival Texaco Inc., said earnings, excluding special items, rose to $1.54 billion, or $2.39 per diluted share, from $819 million, or $1.24 per diluted share, a year earlier. Revenues rose 23 percent to $13.5 billion.
After stripping out foreign currency losses of $8 million, earnings excluding special items came to $2.41 per share. Analysts had expected earnings per share on the same basis of $2.21, according to First Call/Thomson Financial.
Chevron's stock price appears to have drawn little benefit from strong oil and gas prices. The shares are off some 6 percent so far this year and fell 2.5 percent last year, when investors showed little interest in integrated oil stocks as they chased high-flying technology issues.
The bulk of Chevron's earnings came from its "upstream" exploration and production business, which benefited from some of the highest oil and natural gas prices in a decade and a 3 percent increase in production volumes.