This article deceptively makes little mention of Bell's macro condition. Just to say it went from 30,000 employees to 1000 in a 7 year span is not the whole picture. Let me provide some perspective.
If you look at ALU stock mid 2000, it had at a high of over $80. It currently is at 3.80ish with a huge come back from a low of $1.09.
Alcatel and Lucent merged in Dec. of 2006.
In 2007, it lost 3.5 billion on about 18B of sales. In 2008 it lost 5B in 2008 on about 17B of sales. It has had about 4B in cash (&equivalents) and is providing itself with runway to get back into the black with asset sales.
Since the merger, there have been multiple lay off initiatives to try and stop the bleeding. (Not pansy 5-10% cuts, we're talking about deeper broader strokes)
Recently, it has begun to do better but is still rolling deep with legacy products and losses.
ALU is fighting for it's life. Facing these conditions, most companies would have severely cut a 'no short term profit' R&D division.
The cherry to top off this Article is that ALU is a French company with Lucent and Bell as its American subsidiaries.
Edit: Grammar and full disclosure: I am an ALU employee.
I think you have to go back farther than the 2000s for the real reason of its decline. The government split up the telecoms because they were monopolies, and that killed the cash cow that was powering all this research. It seemed bad at the time, but the litany of innovations that came about may have made it worth the extra price for long distance calling.
Today I don't think anyone is looking for Bell to come back, but for Microsoft, Google, Apple, IBM, Accenture, GE, Boeing, Lockheed, Oracle and other companies with huge cash stockpiles and big teams of scientists to get into more of a pure research role.
Oh I agree. When a company has such a long storied history like Lucent then there can be many butterfly effects. It's just lately (past 2 years), the financial picture for Alcatel-Lucent has gotten really bad.
Another factor for such a huge decline was it was at a speculative peak in the 2000s. Investors figured that as the internet switched from text to rich media (video, voip, etc), there would be huge bandwidth demands. A little new gadget called the cell phone was also on the rise. The telecommunications infrastructure would have to be laid reaping huge profits for ALU, they all figured. The stock price got pumped up and when, the company could not deliver...
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This article deceptively makes little mention of Bell's macro condition. Just to say it went from 30,000 employees to 1000 in a 7 year span is not the whole picture. Let me provide some perspective.
If you look at ALU stock mid 2000, it had at a high of over $80. It currently is at 3.80ish with a huge come back from a low of $1.09.
Alcatel and Lucent merged in Dec. of 2006.
In 2007, it lost 3.5 billion on about 18B of sales. In 2008 it lost 5B in 2008 on about 17B of sales. It has had about 4B in cash (&equivalents) and is providing itself with runway to get back into the black with asset sales.
Since the merger, there have been multiple lay off initiatives to try and stop the bleeding. (Not pansy 5-10% cuts, we're talking about deeper broader strokes)
Recently, it has begun to do better but is still rolling deep with legacy products and losses.
ALU is fighting for it's life. Facing these conditions, most companies would have severely cut a 'no short term profit' R&D division.
The cherry to top off this Article is that ALU is a French company with Lucent and Bell as its American subsidiaries.
Edit: Grammar and full disclosure: I am an ALU employee.
I think you have to go back farther than the 2000s for the real reason of its decline. The government split up the telecoms because they were monopolies, and that killed the cash cow that was powering all this research. It seemed bad at the time, but the litany of innovations that came about may have made it worth the extra price for long distance calling.
Today I don't think anyone is looking for Bell to come back, but for Microsoft, Google, Apple, IBM, Accenture, GE, Boeing, Lockheed, Oracle and other companies with huge cash stockpiles and big teams of scientists to get into more of a pure research role.
Oh I agree. When a company has such a long storied history like Lucent then there can be many butterfly effects. It's just lately (past 2 years), the financial picture for Alcatel-Lucent has gotten really bad.
Another factor for such a huge decline was it was at a speculative peak in the 2000s. Investors figured that as the internet switched from text to rich media (video, voip, etc), there would be huge bandwidth demands. A little new gadget called the cell phone was also on the rise. The telecommunications infrastructure would have to be laid reaping huge profits for ALU, they all figured. The stock price got pumped up and when, the company could not deliver...