ALCATEL CHIEF IS OUT AS TURNAROUND STALLS
By SAM SCHECHNER And DANA CIMILLUCA
PARIS—Burning cash and reeling from cutthroat competition, Alcatel-Lucent SA said Thursday that its chief executive will step down after a transition period to find a successor.
Some directors have been frustrated with Ben Verwaayen's slow progress in turning around the telecommunications equipment maker, one person close to the board said. Another person said the decision was mutual and that Mr. Verwaayen had managed to stabilize the company. The company is searching for a replacement, and Mr. Verwaayen plans to stay on until one is found, Alcatel-Lucent said.
"Leadership has always a sell-by date," said Mr. Verwaayen said on a conference call with reporters Thursday morning. "It's also good for the company to get some fresh perspectives."
The CEO's departure comes at a turbulent time for the equipment maker. More than six years after France's Alcatel merged with U.S.-based Lucent Technologies to create a telecom-equipment giant, the company is discovering that it can't keep up in the global tech race. It is smaller by revenue than most of its competitors. But it competes in more lines of business than almost all of them. It has racked up billions of euros of red ink for its efforts.
Under Mr. Verwaayen's leadership, Alcatel-Lucent has pinned hopes on leading the market for next-generation networks. But when France's two largest cellphone operators launched the first next-generation wireless networks in the Paris area last week, they weren't using Alcatel-Lucent's gear.
Instead, they went with competitors who had figured out how to bundle the new network alongside existing ones all in the same small transmitter—something Alcatel-Lucent couldn't easily match. The Paris-based company was outflanked in its back yard.