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Tuesday, 28 August, 2001, 14:23 GMT 15:23 UK
Israel loses high tech jobs
Lucent website
Lucent is to pull out of fibre optics
Lucent is to close an Israeli fibre optical company it bought only last year for $4.5bn, and shed at least 130 high tech jobs.

At the time, the takeover was the most expensive in Israeli corporate history, correspondents say.

When Lucent bought Chromatis in May 2000, it said the Israeli network traffic specialist's Metropolis product would give it an important advantage against rival Nortel Networks.

Lucent president Harry Bosco forecast "several hundred million of dollars in revenue" from Metropolis sales in 2001.

Niche market folds

Lucent's decision to close Chromatis is part of the struggling US giant's restructuring, which has led to its withdrawal from fibre optics.

Market changes and the focus on large service providers have led us to take this decision

Lucent spokesman
Instead, Lucent will concentrate on selling products to a few major customers.

"There was clearly a niche that was to be filled by Chromatis but market changes and the focus on large service providers has led us to take this decision," said Hans Kettenbach, a spokesman for Lucent based in Germany.

Lucent has "30 customers around the world that account for 75% of revenues", said Mr Kettenbach. "It's only natural we increase our focus on this group of customers."

Henry Schacht - Chairman and CEO of Lucent Technologies
Chairman and CEO Henry Schacht: restructuring needs 'to go deeper'
In July 2001, Lucent said it would sell its fibre optic cable division to Japanese firm Furukawa and US fibre-optic cable-maker Corning.

Global cutbacks

The division employed abut 6,000 people and had sales of about $2bn (1.4bn) in 2000.

Lucent also reported it had moved into the red, making a loss of $1.2bn, excluding one-off items, for the third quarter - far worse than expected. In the same period last year it made a profit.

The company said it intends to return to profitability in 2002.

Worldwide, it has trimmed its workforce by over 30,000 this year in an effort to adapt to the US slowdown and the collapse of many companies.

See also:

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