The overall restructuring plan is part of the company’s strategy to become profitable.
Lucent Technologies Inc., the Murray Hill telephony company, said it would close its Hopewell operation, cutting about 300 jobs.
About 13,000 mid-level managers in the company also were offered early retirement packages, which were accepted by 8,500 of them, the company confirmed July 12. The overall restructuring plan is part of the company’s strategy to become profitable, which may still result in up to 20,000 more layoffs at the company into the future. Henry Schacht, the company’s CEO, also told Lucent’s employees July 12 to expect further layoffs, The New York Times has reported. An announcement concerning possible future layoffs will be made in September, Lucent said.
This news comes on the heels of numerous problems at Lucent, which most recently included the company’s bond rating being downgraded to junk status by Standard & Poor’s (S&P), the international credit rating firm.
According to S&P, the downgrade decision was based on the falling demand for the company’s products, combined with a failed attempt to spin off Agere Systems Inc., its optoelectronic component unit, and the continuing series of layoffs.
The company’s rating had been put on credit watch in March following a $2 billion shortfall in proceeds from its Agere Systems initial public offering (IPO), S&P explained, and also opined that Lucent wasn’t likely to return to a level of operating profitability until the first half of fiscal 2002.
In addition to the bond downgrade, other bad news for the company has included the abrupt departure of Lucent’s CEO and CFO, an investigation by the Securities & Exchange Commission over what the agency identified as a "revenue issue," and a class action suit brought by Lucent’s shareholders alleging, among other things, fraud and stock manipulation by the company.