After six consecutive quarters of eroding profits, the telecommunications-equipment firm Alcatel-Lucent announced it would dump the two architects who orchestrated the company’s merger two years ago.
Alcatel-Lucent announced that Patricia Russo, the company’s chief executive, and chairman Serge Tchuruk will step down at the end of the year, as the telecom firm posted a second-quarter loss of $1.7 billion, a larger-than-expected drop.
The company has not posted a profitable quarter since it was created in November 2006, when U.S.-based Lucent Technologies merged with Alcatel of France.
“The merger phase is now behind us,” Mr. Tchuruk said in a press statement, the New York Times reported. “I am proud that Alcatel-Lucent has become a world leader in a technology which is transforming our society. It is now time that the company acquires a personality of its own, independent from its two predecessors. The board must also evolve and the chairman should give the first example, which I have decided to do.”
Shareholders had sharply criticized top directors at Alcatel-Lucent, which has seen its market capitalization cut in half since the merger. Additionally, the company’s shares have fallen 60 percent since last year, as shareholders grew increasingly impatient.
"These departures are not a total surprise," Alexander Peterc, an analyst at Exane, told Reuters. "It is a good thing that the company can now move forward and put behind it the differences between the Lucent parts and Alcatel side."
The sharp decline of Alcatel-Lucent’s CDMA network business accounted for $1.2 billion of the company’s massive quarterly writedowns, the company announced in a statement.
No immediate successors to Russo or Tchuruk have been announced, which has caused concern among analysts.
"I don't think it should be seen as good news," Thomas Langer, an analyst at WestLB, told the Wall Street Journal. "What you need in such difficult times is true leadership."