NEW YORK-Lucent Technologies Inc. has announced another round of layoffs even as Standard and Poor’s cut the wireless vendor’s credit rating one notch to “B -,” its sixth-highest junk rating.
The company said it will cut 10,000 more jobs, or 22 percent of its work force, and it expects to report a wider-than-expected fourth-quarter loss.
The job cuts will bring down the staff strength to 35,000 instead of the projected 45,000 at the end of the year. Lucent has been slashing its work force repeatedly since the industry’s meltdown began last year. It had anticipated to bounce back to profitability after cutting half of its about 106,000 staff last year, but the company’s fortunes have continued to dwindle even as its once prized stock has dropped to below a dollar, raising the specter of delisting.
Its shares may stumble, but Lucent still seems to hold some cheer.
“Despite the challenges, we intend to return to profitability in fiscal 2003 and we are taking more aggressive restructuring actions to bring our breakeven down even further,” said chief executive officer Patricia Russo.
The wireless player took $4 billion in charges for severance and a decline in its pension assets.
“In light of our revised forecasts for fiscal 2003 and our new breakeven plan developed in the last few weeks, we re-evaluated several balance sheet items, including inventory,” said chief financial officer Frank D’Amelio.
Although it had estimated a breakeven rate of between $2.5 and $3 billion, it now pegs it at $2.5 billion. The company canceled a $1.5 billion credit facility, although it intends to repurchase some of its real estate properties. Its cash and marketable securities dropped from $5.4 billion to $4.4 billion, a metaphor of its sequential loss of cash.
“Lucent continues to have sufficient liquidity to fund its operations and business plans,” said D’Amelio.
