| Former type | Public |
|---|---|
| Industry | Telecommunications |
| Fate | Merged with Alcatel to become Alcatel-Lucent |
| Founded | 1996 |
| Defunct | 2006 |
| Headquarters | Murray Hill, New Jersey, USA |
| Key people | Ben Verwaayen, Chairman and CEO |
| Products | See [1] |
| Revenue | $9.44 billion USD (2005) |
| Employees | 30,500 (2006) |
| Website | alcatel-lucent.com |
Alcatel-Lucent USA, Inc., originally Lucent Technologies, Inc. is a French-owned technology company composed of what was formerly AT&T Technologies, which included Western Electric and Bell Labs. It was spun off from AT&T on September 30, 1996.
Lucent was purchased by Alcatel SA of France to form Alcatel-Lucent on December 1, 2006.[2]
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One of the primary reasons AT&T chose to spin off its equipment manufacturing business was to permit it to profit from sales to competing telecommunications providers; these customers had previously shown reluctance to purchase from a direct competitor. Bell Labs brought prestige to the new company, as well as the revenue from thousands of patents.
At the time of its spinoff, Lucent was placed under the leadership of Henry Schacht, who was brought in to oversee its transition from an arm of AT&T into an independent corporation. Richard McGinn succeeded Schacht as CEO in 1997. Lucent became a "darling" stock of the investment community in the late 1990s, rising from a split-adjusted spinoff price of $7.56/share to a high of $84. In 1997, Lucent acquired Milpitas based voice mail market leader Octel Communications Corporation for $2.1 billion, a move which immediately rendered the Business Systems Group profitable. By 1999 Lucent stock continued to soar and in that year Lucent acquired Ascend Communications, an Alameda, California-based manufacturer of communications equipment for US$24 billion. Lucent held discussions to acquire Juniper Networks but decided instead to build its own routers internally.
On January 6, 2000, Lucent made the first of a string of announcements that it had 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. In November 2000, it also disclosed to the SEC that it had a $125 million accounting error for the third quarter of 2000. Subsequently, its CFO, Deborah Hopkins, left the company in May 2001 with Lucent's stock at $9.06 whereas at the time she was hired it was at $46.82.[3]
By October 2002, when its stock price bottomed at 55 cents per share, Henry Schacht had been brought back on an interim basis to replace McGinn. Patricia Russo was named permanent Chairman and CEO, succeeding Schacht who remained on the Board of Directors.[4]
In April 2000, Lucent sold its Consumer Products unit to VTech & Consumer Phone Services. In October 2000, Lucent spun off its Business Systems arm into Avaya, Inc., and in June 2002, it spun off its microelectronics division into Agere Systems. The spinoffs of enterprise networking and wireless, the industry's key growth businesses from 2003 onward, meant that Lucent no longer had the capacity to serve this market. [5]
Lucent was reduced to 30,500 employees, down from about 165,000 employees at its zenith. The layoffs of so many experienced employees meant that the company was in a weakened position and unable to reestablish itself when the market recovered in 2003.[5]
Lucent continued to be active in the areas of telephone switching, optical, data and wireless networking.
On April 2, 2006, Lucent announced a merger agreement with Alcatel, which was 1.5 times the size of Lucent.[2] Serge Tchurk became non-executive chairman, and Russo served as CEO of the newly merged company, Alcatel-Lucent, until they were both forced to resign at the end of 2008. The merger failed to produce the expected synergies, and there were significant write-downs of Lucent's assets that Alcatel purchased.[6]
In December 2010, Alcatel-Lucent was found guilty and agreed to pay more than US$137mil to settle charges brought against it by the federal government. The Securities and Exchange Commission (SEC) accused the Paris-based maker of telecommunications gear of paying bribes to foreign government officials, in violation of the Foreign Corrupt Practices Act, to illegally win business in Latin America and Asia.
Lucent is divided into several core groups:
The Murray Hill anechoic chamber, built in 1940, is the world's oldest wedge-based anechoic chamber. The interior room measures approximately 30 feet (9.1 m) high by 28 feet (8.5 m) wide by 32 feet (9.8 m) deep. The exterior concrete and brick walls are about 3 feet (0.91 m) thick to keep outside noise from entering the chamber. The chamber absorbs over 99.995% of the incident acoustic energy above 200 Hz. At one time the Murray Hill chamber was cited in the Guinness Book of World Records as the world's quietest room. It is possible to hear the sounds of skeletal joints and heart beats very prominently.
The Murray Hill facility is currently the global headquarters for Lucent Technologies. The Murray Hill facility also has the largest copper-roof in the world. When Lucent Technologies was experiencing financial troubles in 2000 and 2001, one out of every three fluorescent lights was turned off in the facility. The same was done in the Naperville and Allentown, Pennsylvania facilities for a while. The facility has a cricket field and features a nearby station from which enthusiasts can control RC airplanes and helicopters.
According to its SEC filing, In April 2004 Lucent fired its president, COO, a marketing executive and a finance manager at its China operations for FCPA violations. These violations were uncovered through internal investigations triggered by the (unrelated) US DOJ and SEC probe into possible Lucent's FCPA violations in Saudi Arabia.
The Lucent logo, the Innovation Ring,[7] was designed by Landor Associates, a prominent San Francisco-based branding consultancy. One source inside Lucent says that the logo is actually a Zen Buddhist symbol for "eternal truth", the Enso, turned 90 degrees and modified. Another source says it represents the mythic ouroboros, a snake holding its tail in its mouth. Lucent's logo also has been said to represent constant re-creating and re-thinking.[8]
After the logo was compared in the media to the ring a coffee mug leaves on paper, a Dilbert comic strip showed Dogbert as an overpaid consultant designing a new company logo; he takes a piece of paper that his coffee cup was sitting on and calls it the "Brown Ring of Quality".[9]
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