Lucent Technologies (Murray Hill, NJ) announced a restructuring plan designed to help fix the company's current financial situation. The company will cut 10,000 jobs, or 10 percent of its workforce. The company lost $1.02 billion in its first quarter, compared with a profit of $1.08 billion a year ago.
The restructuring plan is designed to cut $2.0 billion in expenses and to restore profits, which have been in decline because of a downturn in the telecommunications sector and due to the company's missteps in optical networking. The company will take a second-quarter charge of $1.2 billion to $1.6 billion to cover its restructuring.
Lucent also plans to outsource more of its manufacturing and reduce capital spending by $400.0 million by year's end. It also announced a $4.5 billion credit facility from J.P. Morgan and Salomon Smith Barney, addressing its cash flow needs as the company tries to return to profitability.
