Chief Executive Patricia Russo says refreshed technology, developing-world orders and the service business will spur recovery at the telecomPatricia Russo was beaming on Dec. 1, 2006, when she appeared at a Paris press conference celebrating her appointment as chief executive officer of Alcatel-Lucent, a $26 billion global telecom equipment giant newly created by an historic Franco-American merger.
She has had little reason to smile since then. Alcatel-Lucent (ALU) has posted three consecutive quarterly losses. On Oct. 31, the company announced an emergency restructuring plan (BusinessWeek.com, 10/31/07) under which one in five of its 80,000 employees will lose his job by 2009. Shares are down a stomach-churning 50% since January, and five of Russo's top deputies have left the company. Some analysts speculate that Russo herself could be next out the door. (BusinessWeek.com, 9/28/07) No wonder many industry-watchers now say the merger was a mistake.
Russo agrees it has been an awful year for Alcatel-Lucent. But in an interview with BusinessWeek at her office near the Champs Elysées, she staunchly defends the merger and cites evidence the worst is now over. "It's easy to sit on the sidelines and make strategic judgments," she says. Alcatel-Lucent's recent turmoil stems not from bad strategy but from "problems that we're going to work our way out of."
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