Lucent Technologies

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

In 1996, AT&T spun off its Systems and Technology units (including Western Electric), along with the famous Bell Laboratories, to form a new company named Lucent Technologies {{nyse|LU}}, under the leadership of Henry Schacht, who was brought in to oversee the transition of Lucent from an arm of AT&T into an independent corporation.

Related Topics:
1996 - AT&T - Western Electric - Bell Laboratories - Henry Schacht

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

One of the primary reasons for the spinoff was to allow AT&T's equipment manufacturing business to profit from sales to competing telecommunications providers; these customers had previously shown reluctance at purchasing from a direct competitor. Bell Labs brought prestige to the new company, as well as the revenue from thousands of patents.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Richard McGinn succeeded Henry Schacht as CEO in 1997. Lucent became a "darling" stock of the investment community in the late 1990s, rising from a split adjusted spin-off price of $7.56/share to a high of over $80. However, in January, 2000, Lucent missed its quarterly estimates, and when it was later revealed that it had used dubious accounting and sales practices to generate some of its earlier quarterly numbers, Lucent fell from grace. By October, 2002, when its stock price bottomed at 58 cents per share, Henry Schacht had been brought back to replace Rich McGinn.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

In 1999, Lucent acquired Ascend Communications, an Alameda, CA based manufacturer of communications equipment for $24B USD. In October, 2000, Lucent spun off its business telecommunications arm into Avaya, Inc., and in June, 2002, it spun off its microelectronics division into Agere Systems.

Related Topics:
Ascend Communications - Avaya - Agere Systems

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

In 2002, Lucent began making significant cuts to the health care and retirement benefits of many of its 125,000 retirees. Although Lucent contends these and future cuts are necessary for its survival, they have nevertheless generated a continuing flow of negative publicity in the news media, and many point to the cuts as an example of why there is a need for legislation to protect American retiree health care benefits.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~

Today, Lucent has 31,000 employess, down from about 150,000 employees at its zenith. Lucent is active in the areas of traditional telephone switching, optical, data and wireless networking. Patricia Russo currently heads the company.

~ ~ ~ ~ ~ ~ ~ ~ ~ ~