Alcatel-Lucent SA Chief Executive Officer Ben Verwaayen will step down after 4 1/2 years of efforts to turn around the phone-equipment maker failed to stem a slump in cash reserves and withstand global competition.
The company employs several hundred people in North Carolina, including an operation in Raleigh.
Verwaayen, whose contract is due to be renewed in May, has decided not to seek an extension, the Paris-based company said in a statement today. The 60-year-old will remain in place as the board considers internal and external candidates, it said.
Alcatel-Lucent shares jumped 10.6 percent in Paris on the news.
Verwaayen’s resignation follows a 70 percent slump in the stock under his watch amid sliding revenue and losses in market share to Chinese rivals.
Just as Nokia Siemens Networks’ job cuts have begun to boost profitability and Ericsson AB is winning contracts in North America, Alcatel-Lucent said today a $1.9 billion asset-impairment charge sunk the company into another quarterly loss.
“After five years in the business, you have to reflect,” Verwaayen said today during a conference call. “The task ahead is focused on execution, execution, execution. Maybe that’s not my natural strength, and maybe it’s good for the company to get a fresh perspective.”
The former BT Group Plc CEO followed in the footsteps of predecessors Patricia Russo and Serge Tchuruk, who oversaw the 2006 merger of Alcatel SA and Lucent Technologies Inc. and were never able to translate billions of dollars of research to develop equipment used in the newest generation of wireless networks into profits.
Verwaayen joined Alcatel-Lucent in 2008 after the ouster of the previous management team.
Alcatel-Lucent supplies telecom operators and corporations the technology for building global communications networks. It has suffered from repeated rounds of costly layoffs and restructuring, as well as intense competition from the likes of Ericsson of Sweden, China’s Huawei and Nokia Siemens Networks, a Finnish-German joint venture.
The Franco-American company is in the middle of a restructuring program aimed at cutting 5,500 jobs, ending unprofitable contracts and leaving or reorganizing operations in poor markets.
Verwaayen said Thursday the company has “seen progress” on the plan announced last July, and pointed to growth in its order book as a sign of customer confidence.
Alcatel-Lucent had aimed to raise its profitabilty from the 3.9 percent adjusted operating margin achieved in 2011, but abandoned that target halfway through the year. It finished 2012 with an adjusted operating margin of only 2.9 percent.