Lucent shuts down Israeli operation

Embattled telco equipment maker Lucent has confirmed that it has shut down Chromatis Networks, the Israeli business it acquired only last year in a all-share deal then valued at $4.5bn.

The closure means 150 job losses and speaks volumes about the mistakes made by Lucent's previous management, which recently received multi-million pound pay-offs.

Lucent gave Chromatis billions of dollars worth of shares in an attempt to improve its position in the optical metro-networking niche against competitors such as Nortel and Cisco.

But Lucent admitted that the Chromatis product had attracted only two customers over the past year compared with 20 customers for Lucent's two other metro-networking products.

Indeed, Lucent's shares have fallen so dramatically since last year's deal that the same deal today would be worth only $570m.