The local division of Lucent Technologies was informed last week that the company will withdraw its direct presence in SA. This forms part of the parent company`s desperate attempt to return to profitability.
Simpiwi Msibi, Lucent PR and marketing manager in SA, says the news forms part of Lucent`s second phase of restructuring which included the company`s withdrawal from Turkey.
Facing the brunt of the global slowdown, the New York Stock Exchange-listed company has seen its share price plummet from $84 in December to $6.65 last week.
While the stock has lost more than half its value this year, it has still outperformed the S&P Communications index by 18% for the period - indicative of the current state of the telecoms market.
According to Msibi, the restructuring plans affect around 50 staff members in SA, and is part of an international rationalisation which will see around 60 000 workers axed.
She adds that while Turkey and SA are the first in the EMEA region to receive news on the shutting-up-shop exercise, many more of the operations within the region will soon hear how the cutbacks will impact them.
Msibi says Lucent has been approached by four local distribution companies to represent the company`s products through an indirect channel partnership.
The announcement of the winning distributor will be made at the end of September and negotiations will begin on contracts shortly thereafter. This fits in with the company`s deadline to exit the market by year-end.
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