Lucent Loses $3.25 Billion In 3Q, Plans More Layoffs

The tough times aren't over for Lucent Technologies Inc., which Tuesday reported a $3.25 billion third-quarter loss and a plan to lay off as many as 20,000 more workers. Lucent blamed the loss on lower revenues across all of its product lines, a reduction in sales of high-margin software, and the loss of several contracts here and abroad.

"Lucent's hit some pretty tough times," says Tracey Vanik, technical director at market research firm RHK. Two things that may turn the tide in Lucent's favor, however, if and when the economy picks up: Its strengths in optical networking technologies and its focus since last year on networking equipment based on IP technologies--the protocol that will be at the heart of almost all new data networks, Vanik says.

The $3.25 billion loss for Lucent's third fiscal quarter, ended June 30, amounts to a loss of 95 cents a share, and compares with a $301 million loss, or 9 cents a share, in the same quarter last year. Lucent's revenues for the quarter were $5.82 billion, a 21% decline from the $7.41 billion in revenues it earned in the same quarter a year ago.

After a previous round of cost-cutting measures that already resulted in 19,000 job cuts this year, the company is planning the second phase of its restructuring that will eliminate 15,000 to 20,000 more jobs, said top Lucent executives. Other cost-cutting plans include a $2 billion reduction in its annual operating expenses, a $1 billion improvement in working capital performance, and a $750 million reduction in its capital spending, according to the executives. The second-round of spending cuts are intended to return Lucent to profitability sometime next year and will result in a $7 billion to $9 billion one-time charge the company will take in the fourth quarter of this year, the executives said.