Can Russo save Alcatel-Lucent?

NEW YORK (Fortune) -- Embattled Alcatel-Lucent CEO Pat Russo on Wednesday announced job cuts, management shifts and other organizational changes aimed at repairing the struggling telecom-equipment giant. Investors expecting bold restructuring are sure to be disappointed.

"We feel the restructuring plans announced so far, miss the key strategic issues which the company faces," UBS analyst Nikos Theodosopoulos, senior analyst at UBS wrote in a "first look" note shortly after Paris-based Alcatel-Lucent revealed its plans, which include 4,000 additional job cuts, a new CFO and a streamlining of certain operations.

Russo is under pressure to save the company.

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Russo, who led Lucent Technologies of Murray Hill, N.J., before the company merged with French Rival Alcatel late last year, has been under tremendous pressure to fix the combined company's problems. The company, for example, has issued three profit warnings this year. (On Wednesday, Alcatel-Lucent (Charts) also reported a third-quarter net loss of $373 million, in line with Russo's revised guidance for the quarter. She said the results "still are not at a level that we are satisfied with.")

As she outlined her plans on a call with analysts and journalists Wednesday, Russo sounded confident and self-assured, and not at all defensive about the challenges facing the combined company. Indeed, she was candid about the various pressures on the company in several slides during her presentation, and summed up those issues in response to an analyst's question about Alcatel-Lucent's seemingly conservative guidance on the future performance of the company.

"I don't believe we're being overly cautious," she said. "We're trying to be realistic... This is an industry that's got an awful lot of change. Our customers are going through (change), there are major technological changes we're going through, and the competitive landscape for our customer is changing."

Still, as Russo outlined her three-point plan for change, many of the ideas seemed logical but not especially bold. Indeed, many seemed like the kinds of changes the company could have, and perhaps should have, implemented from the outset of the merger. Russo talked on the call about how the new plan ensures that "ownership for the execution is clear."

But in a complex, cross-cultural merger such as the combination of Alcatel and Lucent, surely clear lines of responsibility for execution and operations should have been established from the beginning.

Similarly, "an offensive market strategy" that focuses on developing products and services in high-growth areas seems a no-brainer for any business, regardless of its position in the marketplace.

Only the steamlining of regional operations into two groups, Americas and Asia Pacific/Europe/Middle East/Africa, from four groups, seems particularly radical, because most telecom services companies do operate separate groups for the different parts of the world.

To be fair, Russo and her management team may not have been able to implement such changes until they'd had a chance to see how the combined company was working (or wasn't working) for a few months. But Russo and Co. had to know going into the merger that it was going to be an especially tough task to integrate and grow in a rapidly changing industry.

And Russo did seem to indicate that at least part of her plan should have been implemented sooner. In response to an analyst's question about what she would have done differently in hindsight, she said: "Knowing what I know now, and assessing the situation, I would have moved to streamline and simplify some of these aspects of our organization earlier in the year."