Lucent Predicts Financial Improvement By Second Half Of 2001

Lucent plans 10,000 job cuts and streamlined supply chain management as part of a seven-point plan to cut $2 billion in costs on its way back to profitability.

The plans were unveiled after Lucent reported its financial results for its first fiscal quarter.

The company posted a pro forma continued operations loss for the quarter ended Dec. 31 of $1.02 billion, or 30 cents per share, compared with year-ago quarter earnings of $1.08 billion, or 33 cents per share.

Lucent's CEO Henry Schacht says sales should improve during the second quarter of 2001 and expenses should drop down during the second part of the year.

"Most of the financial impact will occur in the second half of the year," Schacht said during a call with analysts. "Our problems are fixable."

Schacht said the company's No. 1 goal is to rebuild its North American sales team. "Make no mistake about it, this management team is operating as a unified group," he said.

Miscommunication among the sales staff cost Lucent $679 million in revenue during the fourth quarter of 2000, the company says.

Schacht said he would stay on as CEO until a permanent CEO was found. He declined to speculate how long that would be. Schacht returned to Lucent last October.

Following the news, Lucent shares rose 93 cents, or 5 percent, to $19.75 per share in morning trading.