Lucent ousts chief executive McGinn

Telecoms equipment giant Lucent Technologies has ousted its chief executive, Richard McGinn, in an attempt to improve its financial performance.

In a meeting this weekend to review its recent financial performance and outlook for the current quarter, Lucent's board of directors decided that an "immediate change in leadership was necessary".

Henry Schacht has been appointed chairman and chief executive of the company, a position he retired from in 1997. Schacht was chief executive officer and chairman of Lucent from 1995 to 1997, when he retired as chief executive. He remained as chairman until 1998.

In March Schacht was named chairman of the Lucent spin-off Avaya, where he will remain on the board of directors but will step down immediately from his position as chairman.

Franklin Thomas, Lucent's senior director, said: "This was a difficult decision made after considerable deliberation. Rich has made significant contributions to Lucent over the past five years as he focused the company on the growth markets and key technologies that would ensure its future prosperity. However, the board felt a different set of skills was required at this point in the company's life."

At the same time, Lucent warned that it expects pro forma revenue from continuing operations for the current first financial quarter to decline by about seven per cent and pro forma earnings per share from continuing operations to break even.

Lucent said it expects sequential improvement in results from operations each quarter for the rest of the financial year.

These predictions do not include the effect of plans for a business restructuring charge, the company said.

Lucent also confirmed that it would move ahead with plans to spin off its micro-electronics business and sell its power systems business.

Earlier this month the company lost another senior executive as it continues with its reorganisation. John Drew, former chief executive of Lucent's networkcare professional services division, left as the company combined its three services divisions into one.