Lucent to axe a further 7,000 jobs

Despite lower than expected losses in its first quarter, Lucent Technologies announced further job cuts and revealed plans to sell some of its operations.

According to the company, more than 7,000 additional jobs, or 11 per cent of its workforce, will be cut by June, a higher figure than previously stated.

The cuts will come through selling off two businesses and outsourcing some manufacturing operations in Massachusetts.

Lucent has already slashed its staff from 123,000 to 74,000 through a combination of voluntary buyouts, layoffs and sales of some businesses.

In addition, another 12,000 workers at its Agere subsidiary will leave the payroll if Lucent can complete its repeatedly delayed spin-off by June.

Although the company had warned of further job cuts this year, the latest round will reduce overall headcount to under 55,000 by the end of June. Lucent had previously said the figure would be between 57,000 and 62,000.

Despite the increased cuts Lucent said that the narrower loss showed that its restructuring moves were beginning to work.

Yesterday's 23 cents a share loss beat analyst estimates by one cent. Lucent said that it was still suffering from the weak economy which limited capital spending by its key telephone and internet service provider customers.

But chairman Henry Schact explained that the company believed the first quarter was the low point for Lucent's sales and that, while there was no upturn yet, the company is seeing some stability in the market.