Business Insight Zone

The other shoe finally, finally drops at the trans-Atlantic telecom equipment maker:

Alcatel-Lucent’s Russo, Tchuruk to Quit; Loss Widens

Alcatel-Lucent SA, the world’s largest supplier of fixed-line phone networks, said Chief Executive Officer Patricia Russo and Chairman Serge Tchuruk quit after the sixth straight quarterly loss.

The second-quarter net loss widened to 1.1 billion euros ($1.7 billion), or 49 cents a share, from 586 million euros, or 26 cents, a year earlier, the Paris-based company said in a statement today.

Russo and Tchuruk were the architects of Alcatel SA’s November 2006 purchase of Lucent Technologies Inc., creating a company that has never earned a profit, shed 62 percent of its market value and is eliminating 16,500 jobs. [. . .]

It’s not like we couldn’t see this coming. The merger seemed like a bad idea to many outside observers (including some of my colleagues here at Hoover’s) from the beginning. How was the combination of two bloated, slow companies — much less two companies with cultures forged on opposite sides of the Atlantic — supposed to compete with better with smart outfits like Ericsson and, above all, Cisco?

It never made sense . . . not that that stopped them from going ahead with it.

Now here’s the challenge of all challenges: if the combined Alcatel-Lucent never made sense, is there any leader or leadership team that can make sense of it?

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Related posts:

• Alcatel-Lucent and the right way to do layoffs.
• Alcatel-Lucent — Company of the Day.
• Disorganization Negates Talent.
• A quick summary of the telecom equipment sector.
• Alcatel-Lucent: Ou sont les synergies?

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Category: Telecom