Alcatel-Lucent Officials Push Newest Restructuring Plan

By Jeffrey Burt  |  Posted 2013-06-21 Print this article Print

Jefferies Group analysts George Notter and James Kisner in a research note supported Alcatel-Lucent's efforts to pare the number of businesses, but said they were taking a wait-and-see approach to how well the latest turnaround efforts go.

 "We're reminded that Alcatel-Lucent has been a perpetual restructurer," Notter and Kisner said, according to a report in Bloomberg. "It's hard to really see why this latest restructuring will get executed according to plan and yield the benefits that have been outlined here."

Alcatel-Lucent has struggled to get its financial footing since the merger. The company's first profitable year came in 2011, but that didn't continue in 2012. According to numbers released in February, Alcatel-Lucent lost $1.81 billion in the fourth quarter of 2012, with revenues falling by 1.3 percent.

Officials had hoped the merger would create a networking giant that could rival the likes of Cisco Systems and Ericsson, but instead it created a massive, unwieldy company is many product lines. The merger also occurred just before the global recession hit, forcing enterprises, telecommunications firms and service providers to pull back on their IT spending.

During Verwaayen's tenure, the company went through a number of initiatives to turn the company around, most recently with officials in the summer of 2012 announcing that they were cutting another 5,000 jobs as part of a larger plan to slash $1.5 billion in costs by the end of 2013.

New CEO Combes said his plan gives the company greater focus.

"The Shift Plan redefines Alcatel-Lucent's industrial identity and clarifies its role in the technology ecosystem," he said in a statement. "The goal is now set, and we can focus, with all the Alcatel-Lucent employees, on its delivery and on finally fulfilling the company's potential to create substantial and enduring industrial, social and financial value for all stakeholders."



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