In this environment, the results are very good... Lucent have managed to prove that they can hold their own

Tom Lauria independent analyst

Now a further 6,000 jobs are on the line, reducing the firm's total headcount to 50,000.

The cuts were announced as Lucent revealed a loss of $535m (�369m) for the first three months of the year - better than the $3.7bn lost in the same period of 2001.

The firm has now not reported a profit for two years.

And although Lucent insisted that 2003 will bring a return to profitability, it admitted that the telecoms market over the next few months remained viciously tough.

Lower targets

The losses and further job cuts mean that Lucent is having to lower its sights even further for the foreseeable future.

Until now, the company has said it can return to the black as long as sales beat $4.25bn a quarter.

But sales came in at just $3.52bn between January and March, down from $5.33bn for the first three months of 2001.

"Given the continuing market uncertainty... we are now working toward a break-even revenue figure that will be somewhat below $4bn," said chief executive Patricia Russo.

Not all bad

But despite the apparent bad news, Lucent's shares rose in New York after an initial dip downwards, as analysts commended the much narrower loss than before.

They also noted that gross margins - the profit made per dollar of sales without counting one-off charges, tax and debt interest - were markedly better.

"In this environment, the results are very good," independent analyst Tom Lauria said.

"There's no question Lucent is making improvements. They've managed to prove that they can hold their own."