Alcatel-Lucent, the struggling networking and telecoms equipment maker, has announced that both its chairman and chief executive are being replaced.
Chief executive Pat Russo, rumoured to have been heading out of the company for some time after a series of profit warnings and the company's failure to maintain market share, will go by the end of the year.
Meanwhile chairman Serge Tchuruk, the man largely responsible for the problematic and highly criticised merger of Alcatel with Lucent, will leave the company on 1 October. To compound matters, the firm also reported a deep second quarter loss, stemming from the Lucent side of the business. Henry Schacht, a former Lucent chief executive until Russo took his job in 2002, will also resign from the board with immediate effect.
Shareholders have piled criticism on the two following the poor financial and market share performance of the company, and recently approved changes to the company's structure and processes to make it easier for the rest of the board to dump the pair form the company.
"This is a public admission, if ever one was still needed, that the merger was a failure," said Sal Oppenheim analyst Niclas von Stackelberg.
The company has struggled to compete with cheaper Asian rivals, such as ZTE and Huawei of China, in the manufacture and supply of voice communications, data and mobile networking equipment.
"The merger phase is now behind us. I am proud that Alcatel-Lucent has become a world leader in a technology which is transforming our society," said outgoing chairman Tchuruk in a statement.
"It is now time that the company acquires a personality of its own, independent from its two predecessors. The Board must also evolve and the Chairman should give the first example, which I have decided to do," he added in justification of his departure.
Russo stands to receive a pay-off of up to 6 million (4.72 million) when she leaves the company. Her business style and inability to speak French meant she struggled to win over sceptical French investors in the firm.
With additional reporting from Reuters.
