Uncommon Wisdom

Jul 29 2008   2:02PM GMT

Alcatel-Lucent CEO and chairman say goodbye after more losses

Tom Nolle Tom Nolle Profile: Tom Nolle

Alcatel-Lucent’s Russo and Tchuruk, the CEO and Chairman respectively, are resigning after the company posted yet another loss in the quarterly earnings announcement. The move was applauded by many (most) financial analysts, who believe the team has not been able to sustain the momentum of the companies individually, taking essentially the worst of both.

There is no question that the merger was among the worst in the market’s history in terms of the strategic loss of momentum. However, it is far from clear what will happen now. First, there is no indication who will take over from Russo; no credible candidates have been leaked. Second, the cultural problems of the two companies remain to be addressed. Third, the layers of middle management that were as much the problem as the senior management remain in place, creating a confused muddle of reporting depth that has made it difficult to make bold decisions.

There is a lot to fix, and yet there is also no question that ALU has the best strategic talent and the strongest position in a technical sense in the market today.

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