Alcatel-Lucent board says it supports CEO Russo
By Jeffry Bartash, MarketWatch
Last Update: 4:10 PM ET Oct 2, 2007
WASHINGTON (MarketWatch) -- The board of Alcatel-Lucent on Tuesday said it supports Chief Executive Patricia Russo and called reports that her job could be in jeopardy "erroneous speculations."
Last week, a French newspaper reported Russo had been given one month to craft an emergency-restructuring plan after the network-equipment maker reduced its earnings forecast for the third time in less than a year.
Russo is under pressure to prove she can turn the company around. The $11.6 billion merger of two networking giants, Alcatel of France and U.S.-based Lucent, has failed to meet expectations since the two companies combined late last year.
The cross-Atlantic venture has already cut thousands of jobs and Russo is expected to further shrink Alcatel-Lucent's employee rolls. The board said it plans to meet Oct. 30 to review her latest reorganization.
The French publication Les Echos said last week that Russo was on the verge of losing the support of several board members because of the company's deteriorating financial condition. Shares of Alcatel-Lucent have fallen about 40% so far this year.
Yet in an unusual statement released after European markets closed, the board of Alcatel-Lucent said it was sticking by the company's senior management. "While clearly disappointed in the most recent changes in the company's outlook, the board supports Pat Russo and the leadership team, and the efforts they are making to adapt the company's plans in light of this year's developments," the board said.
Shares of Alcatel-Lucent (FR:013000: news, chart, profile) (ALU) rose a few pennies in late U.S. trades, to stand at $10.12.
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