Bloodbath at Alcatel-Lucent

Bloodbath at Alcatel-Lucent

Summary: Both the chairman and chief executive of Alcatel-Lucent are to step down later this year, following the telecommunications equipment firm's sixth consecutive quarter of losses.

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TOPICS: CXO
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Both the chairman and chief executive of Alcatel-Lucent are to step down later this year, following the telecommunications equipment firm's sixth consecutive quarter of losses.

The resignations of chief executive Patricia Russo and chairman Serge Tchuruk were announced today, along with the French-American company's latest results. Those results showed a reported net loss of €1.1bn and a 5.2 per cent year-on-year drop in revenues.

Alcatel-Lucent chairman
Serge Tchuruk

(Credit: Alcatel-Lucent

The company is also in the process of laying off thousands of workers, with a target of 16,500 job cuts.

"During the second quarter of 2008, the CDMA activity declined at a higher pace than the company had planned," a statement from the company read. "This was due, to a large extent, to a strong reduction in the capital expenditure of a key customer in North America."

Russo, however, is quoted as saying Alcatel-Lucent had "made good progress [operationally] against our turnaround plan in the second quarter, delivering top line and an adjusted operating margin in line with our expectations".

Russo will step down by the end of the year. "Our strategy is taking hold and our results are demonstrating good operational progress," she said in a separate statement. "That said, I believe it is the right time for me to step down. The company will benefit from new leadership aligned with a newly composed board to bring a fresh and independent perspective that will take Alcatel-Lucent to its next level of growth and development in a rapidly changing global market."

Tchuruk, who will walk away from the company on 1 October, said it was necessary for him to leave because it was "time that the company acquires a personality of its own, independent from its two predecessors". France's Alcatel bought the US's Lucent Technologies in 2006 for US$11bn. Tchuruk had been Alcatel's chief executive, and Russo had been chief executive at Lucent.

Henry Schacht, who was Russo's predecessor as Lucent's chief executive, will also resign from the board. According to the company, he will do so because he believes that, "being a former CEO, he should not remain beyond the transitional stage of the merger". The board will subsequently restructure, reducing its membership while taking on "several new members with strong industry expertise".

Alcatel-Lucent's share price had risen by 4.4 per cent at the time of writing on Tuesday morning in Europe.

Topic: CXO

David Meyer

About David Meyer

David Meyer is a freelance technology journalist. He fell into journalism when he realised his musical career wouldn't pay the bills. David's main focus is on communications, as well as internet technologies, regulation and mobile devices.

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