Lucent Technologies - Lucent Spun Off From At&t, Acquisitions And Divestitures Marked 2000, Losses Mounted During 2001

Lucent Technologies Inc.'s core businesses involved the design, development, and manufacture of communications systems, software, and products. The company supplied public and private communication systems and software to most of the world's largest communications network operators and service providers.

Since the time it was formed in 1995 as part of AT&T's restructuring, Lucent was also involved in other communications-related businesses, ranging from consumer products to microelectronics. It left the consumer products market in 1999 and 2000 by selling off its wireless handset unit and other consumer products businesses. To better focus on its core businesses and raise much-needed cash, Lucent sold or spun off significant portions of its operations in 2000 and 2001. In September 2000 Lucent spun off its enterprise networks business, which included voice and data solutions for business and government enterprises, into a separate and independent company, Avaya Inc. At the end of March 2001 Lucent spun off its microelectronics business, which included the manufacture of integrated circuits (ICs) and optoelectronics components, into a separate public company known as Agere Systems Inc. For much of 2001 Lucent was in merger talks with French telecommunications provider Alcatel. After the talks collapsed, Lucent sold its optical fiber and cable unit to Furukawa Electric of Japan.

While Lucent enjoyed strong revenue growth from 1995 to 1999, many of Lucent's businesses were affected by a global downturn in the telecommunications industry in 2000 and 2001. The company was also burdened with debt as the result of numerous acquisitions. In the 12 months preceding September 2001, Lucent's stock fell from around $40 a share to around $6, losing some 85 percent of its market value. The company reported quarterly losses of more than $3 billion for two successive quarters in fiscal 2001. As a result of layoffs and divestitures, Lucent's work-force was reduced by 44 percent from 155,000 employees in mid-2000 to 87,000 in mid-2001.