Verwaayen, who surprisingly quit BT in May, was yesterday named as the new CEO of struggling telecoms group Alcatel-Lucent, which was formed in 2006 by the merger of French group Alcatel and US firm Lucent – and has basically been a money pit ever since. So after one high-profile high-pressure job, he appears to have taken another one – after just three months off. Where do these people get their energy from?
There’s no question that he’s got a huge job on his hands. Alcatel-Lucent is in chaos: it’s in the process of shedding 16,000 jobs, it’s being squeezed on price by rivals, and its share price has sunk by about 60% since the merger. This disastrous showing has already put paid to the jobs of CEO Pat Russo and chairman Serge Tchuruk, both of whom left the company in July. Last quarter it lost over €1bn, so Verwaayen is going to have to go some to get it back into the black.
On the other hand maybe the ex-BT boss thought it was an opportunity he couldn’t turn down. The Dutch-born Verwaayen joined BT from Lucent, where he’d spent four years as vice-president. It’s fair to say that although he wasn't the boss, his time there wasn’t an unqualified success: following a string of badly-judged bets on the European technology market, Lucent was losing $9bn a quarter by the time he left. This shows that the company’s problems run a lot deeper than merger difficulties – but it could also mean that Verwaayen thinks he has unfinished business there.
The alternative interpretation, of course, is that he thinks he can’t do any worse than the previous incumbent. And he may be right. Verwaayen said today that his aim was to transform Alcatel-Lucent from a ‘product-orientated business into a service-orientated business’ – this is likely to be a painful process, but on the plus side most of the hard decisions (like job losses) may have been taken already. There’s a good argument that the company has sunk so far that the only way is up – which makes it a good time for a new CEO to take over the reins.
And of course he does have another powerful reason to rouse himself from his deckchair and cancel his afternoon pina colada: he’ll pick up a basic salary of €1.2m a year, plus a bonus of up to €1.8m if he does the business, plus a raft of shares and options. That’s a lot of reasons to come out of retirement.
In today's bulletin:
BP waves white Russian flag
No boardroom equality for 73 years
The perils of flexible working
Verwaayen reappears at Alcatel-Lucent
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