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Lucent realigns operations
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July 10, 2001: 5:15 p.m. ET
Telecom equipment maker to form separate units, cut 30% of top management
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NEW YORK (CNNfn) - Lucent Technologies took another step in its restructuring Tuesday by announcing it will split into two main operating units and plans to cut 30 percent of top management.
Murray Hill, N.J.-based Lucent plans to condense its five businesses and will operate through two units, wireline and wireless. The job cuts will come from 350 senior executives and are expected to be announced next month, a spokesman said.
Lucent (LU: down $0.34 to $6.01, Research, Estimates) shares dropped more than 5 percent Tuesday on the news.
Mobility, led by Wireless Networks Group's Jim Brewington, will handle all wireless issues. Integrated Network Solutions, which will be led by Janet Davidson, will focus on the remaining businesses, including software and optical products.
Both Brewington and Davidson will report to Bob Holder, executive vice president of Lucent, company spokesman Bill Price told CNNfn.com.
"The changes will happen over the next few weeks," Price said. "We will transition more quickly on the product side and more slowly on customer and sales side to make sure it's seamless."
Lucent also confirmed that Jeong Kim, head of the optical networking group, is leaving the company. The company declined to comment if any layoffs would result from Tuesday's restructuring.
"We are still on track with the previous announced restructuring and the voluntary offers close today," Price said. "Once that is done we see where we are and make decisions."
Lucent, which failed in its $23.5 billion attempted merger with French networking firm Alcatel SA, has announced a number of personnel cuts to help it restructure. In June, Lucent offered early retirement packages to more than 10,000 U.S.-based employees as part of its effort to cut costs.
The telecom equipment maker is reportedly set to cut 10,000 more jobs when it announces third-quarter earnings later this month.
Lucent is struggling with a heavy debt load as well as a slowing economy. The telecom equipment maker had $5.4 billion in debt as of March 31 and must raise $2.5 billion by Sept. 30 to complete the spin-off of its microelectronics unit, Agere Systems Inc.
Lucent's plans to sell its Atlanta-based Optical Fiber unit, which makes and designs optical fiber, fiber cable, and specialty fiber components for the telecommunications industry. The unit is expected to fetch about $3 billion, down from the originally expected $8 billion to $10 billion price tag.
"The optical fiber unit is still for sale," Price said. "We're still working with multiple bidders." 
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