Lucent says extent of job cuts unknown

CHICAGO: Lucent Technologies Inc. plans to cut more jobs to reduce expenses, but it said on Friday that any layoffs would be on a smaller scale than the 15,000 job cuts reported by a financial news Web site. TheStreet.com reported that Lucent is planning another round of job cuts that could reduce the telecommunications equipment maker's work force by as much as 15,000 jobs, bringing its total employment to between 30,000 and 35,000.

Lucent, which currently employs about 50,000, previously had said it aimed to reduce its work force to about 45,000 employees by the end of the calendar year. Last month, the Murray Hill, New Jersey-based company said it was developing other plans to reduce costs and additional job cuts may be necessary. It said any actions would likely be identified during the company's fourth-quarter earnings announcement in October.

Lucent said it has not determined exactly how many jobs would be cut, but it called TheStreet.com's report that 15,000 jobs may be at risk "ludicrous." "Our current plans get us to about 45,000 employees by the end of the calendar year," she said. "To speculate that we're going to cut another 30 percent is ludicrous." Lucent declined further comment on the TheStreet.com report. Some analysts think Lucent's employment could fall below 40,000. The company employed 106,000 at the start of 2001.

TheStreet.com, citing unnamed people close to the company, said new job cuts could result in a potential violation of Lucent's loan covenants if it took a large restructuring charge. It would likely need to restructure its loans to allow more cuts. Shares of Lucent dropped 8 cents, or about 5 percent, to $1.50 on the New York Stock Exchange. Shares of Lucent have fallen 75 percent this year as the company suffered from a sharp downturn in equipment spending by its telecommunications customers.

TheStreet.com, also reported that Lucent is preparing to drop product lines. A number of prized projects and divisions are expected to feel the pinch, including parts of its fabled Bell Labs, some of its highly engineered optical efforts including its LambdaRouter switch and certain areas of data communications and network access lines.

Lucent's annual sales will likely drop to between $9 billion and $11 billion, or $2.5 billion a quarter, TheStreet.com said, citing the sources. For the company's most recent quarter, it reported sales of almost $3 billion and said it was targeting a break-even level at below $3.5 billion.

(C) Reuters Ltd.