Alcatel-Lucent CEO Ben Verwaayen has stepped down from his position after failing to turn things around for the company that is undergoing a tough time owing to huge losses. The decision, however, pleased the shareholders of the French-U.S. company as its share value jumped by 7.7 per cent in early trading, Ottawa Business Journal has reported.
Alcatel-Lucent provides technology for building telecommunication networks. The losses the company has faced during the past few years were not because of Verwaayen’s flawed leadership. In fact, he joined the company in 2008 when it had already been going down. He had been expected to take the company on the road to recovery and eventually to the position from where it can make huge profits.
Verwaayen did not fail completely; during his tenure the company made some progress, but the absolute objective was not achievement and it prompted Verwaayen to step down from his position. However, he will stay with the company as a caretaker until his replacement is appointed.
An interesting thing, as reported by different media outlets, is that the new CEO will be expected to implement the board’s current strategy, which, many analysts argue, might not please the new candidate. They are of the view that the new person would want a free hand to run the business as per their own plans. Whatever the case is, it is certain that the new CEO will be welcomed by a lot of challenges. The company has said that the new CEO could be selected from within the company or outside.
One of the major problems that the new CEO will face is running the €1.25 billion restructuring program, which is already in place and aims at reducing cost by laying off employees and cutting non profitable contracts.
Meanwhile, the decision of Verwaayen’s departure has come after the company announced losses in the fourth quarter. The company’s revenue was a little over €4 billion, but it was around 1.3 per cent down as compared to the same quarter a year ago. Still, Verwaayen believes that the company is well on track of recovery. Forbes quoted him as saying:
“We have addressed half of the previously margin-diluting Managed Services contracts, and show continued and strong growth in IP and Next Generation Wireless. We can see a clear statement of customer confidence through growth in both our order book and backlog.”
Photo: Bloomberg
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