Lucent Technologies, the telecoms firm that employs 800 staff in the Republic, said yesterday its business was much worse than analysts had anticipated and it would have to cut more jobs as spending in the industry remained weak.
The US firm, which has not reported a profit in more than two years, said uncertainty in customer spending, particularly in North America, and market softness had resulted in it targeting a quarterly revenue break-even rate of $2.5 billion (€2.55 billion) to $3 billion, meaning more jobs will be cut.
Lucent, which has already reduced its workforce in the Republic by at least 80 people over the past two years, warned that it would post a 45 cent per share loss during the quarter, nearly triple what analysts had been expecting.
"That will likely result in further [global job\] reductions. As far as a range, we will not speculate right now," a Lucent spokesman said.
The company will provide more details during its fiscal fourth-quarter earnings conference call on October 23rd.
Lucent previously said it would cut its workforce to about 45,000 by the end of the year but acknowledged, in its quest to further cut costs, that more reductions would be likely. The firm had 106,000 staff in January 2001, when it began its restructuring.
Avtera Management analyst Mr Tom Lauria said it was likely the firm would end up with between 30,000 and 35,000 employees.
Lucent's warning that fourth-quarter sales would decline 20-25 per cent underlined news from other equipment-makers that the telecoms market showed no signs of recovery any time soon, he added.
"This is the exact opposite - in fact it's worse - of what we saw in the heyday of 1998 and 1999, where the news flow was continuously good," Mr Lauria said. "Where does this telecom bloodbath end?"
He said the deterioration raised questions about the company's financial health and could have negative consequences on the company's balance sheet. The poor results announcement from Lucent follows the decision by fellow telecoms equipment vendor Tellabs to close its Shannon plant last week with the loss of 400 jobs. Ericsson and Nortel have also cut substantial numbers of jobs recently.
Lucent said, even with the lower-than-expected fourth-quarter results, it expected to meet the financial requirements of its existing $1.5 billion credit facility, which it had not drawn on. It also said it was still targeting a return to profits by the end of its fiscal year 2003.
Lucent said it expected revenue for the fourth quarter, ending this month, to fall 20-25 per cent from the $2.95 billion recorded in the fiscal third quarter. That implies a revenue range of $2.2 to $2.36 billion, compared with the average Wall Street estimate of $2.87 billion, according to research firm Thomson First Call. - (Additional reporting by Reuters)
