Lucent restructure to follow results restating

The company also announced a thorough restructuring to save $1bn a year at a cost to be announced at the end of January.

Lucent now expects losses in its first quarter of 25 to 30 cents per share and a decline in turnover of 20 per cent. The company is slashing its stated revenue for the last quarter of 2000 to $8.7bn from $9.4bn, with profits cut from 18 to 10 cents per share.

Henry Schacht, chairman and CEO of Lucent, said: "These expectations reflect a significant sales decline in North America due to an overall softening in the competitive local exchange carrier market, slowdown in capital spending by established service providers, lower software sales and a more focused use of vendor financing."

For the restatement of its Q4 2000 results, Lucent said that it had sacked an employee for offering credits in connection with a software licence and would therefore cut revenues by $125m.

It is also taking back $452m worth of kit sold to distributors and system integrators under a mistaken guarantee of sale-back. Similar guarantees and mistakenly identified sales accounted for a further $100m.