Alcatel-Lucent on the Skids

It’s been almost two years since Alcatel and Lucent Technologies merged to become Alcatel-Lucent. The merger was supposed to create a strong telecommunications equipment manufacturing competitor. That didn’t happen. The new company has yet to post a profit, and second quarter losses were just announced at $1.7 billion. Consequently, the company’s top executives are being forced out. Analysts apparently never expected this combined leadership team to make it, and their hunch has played out.

I have a personal interest in this story. I began my career in high-tech at Lucent shortly before its creation as a spin-off from AT&T. I watched from the inside as the company rode the dot-com bubble for all it was worth, then crash spectacularly when the bubble burst. Carly Fiorina’s book, Tough Choices, revealed some of the discord that went on among the executive team as they tried to deal with a rapidly changing market. But there was too much of the old AT&T regulated monopoly mindset still running the show, and the company never could break out of the pack. The endless rounds of layoffs finally caught up with me in 2003, and I moved on to greener pastures.

It’s sad to see a once-great company reduced to such a pitiful condition. High-tech has always been a gambler’s game, but no amount of luck can overcome executive mismanagement.


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