Alcatel and Lucent will merge

Monday, April 3, 2006

Lucent Technologies (USA) and Alcatel (France) announced a merger yesterday. The currently-unnamed entity will be a global corporation based in Paris, France and will become the second largest telecommunications equipment company behind Cisco, pulling ahead of Ericsson.

Sixty percent of the new company's shares will be held by Alcatel, but Patricia Russo of Lucent will serve as CEO. Bell Labs, the New Jersey-based research and development holding of Lucent also being acquired by Alcatel, will keep their US headquarters, and a US-based entity will be set up from Bell Labs to manage sensitive US government contracts. The new firm will employ over 26,000 researchers.

However, 8,800 employees, or roughly 10% of the combined personnel, are set to be let go with the merger, after Russo's halving of the Lucent workforce. CFDT, the main French Alcatel union involved in the deal, called a meeting of the French and European Work's council (Comité d'entreprise) in opposition to this move.