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Analysts split on Alcatel-Lucent turnaround plan


The following ran in the Sept. 14, 2012, edition of the Dallas Business Journal. Economist Bernard Weinstein provided expertise for this story.

September 24, 2012

By Jeff Bounds

In 2000, French telecom equipment maker Alcatel had a market value of around $100 billion, while its future marriage partner, Lucent Technologies, was valued at closer to $250 billion, according to Bloomberg data.
Following a $15.3 billion merger in 2006, the combined company, Alcatel-Lucent SA (NYSE: ALU), this week had a market value of closer to $2.68 billion.
And more shrinking is on the way. Following dismal second quarter earnings, Alcatel-Lucent said it would cut some 5,000 jobs from its worldwide staff of 76,000 people. The company, which has seen its workforce at its Plano campus shrink from 4,000 a decade ago to 2,700 today, has not specified where the staff cuts will come, or when....

Even in a worst-case scenario, in which Alcatel-Lucent’s North Texas jobs hypothetically were to disappear, the Dallas-Fort Worth area could handle the economic impact, according to Bernard “Bud” Weinstein, an economist at the Cox School of Business at Southern Methodist University in Dallas.
“That obviously wouldn’t be good for the 2,700 employees. It might have some impacts on the local real estate market,” he said. “But in the overall scheme of things, it would probably be a hiccup. We have about 3 million people who work in the Dallas-Fort Worth area.”