Losses at the telecoms equipment maker Lucent Technologies widened to almost $8bn (�5bn) during the last three months.

The company has also announced plans to cut 7,000 jobs.

The company's net loss of $7.91bn included a $5.83bn charge, essentially past losses which for accounting reasons were included in this quarter's results.

Analysts were shocked by the news. "A charge of $5.8bn is absolutely staggering, regardless of why it's being taken," independent telecom analyst Tom Lauria said.

Spending constraints

By the end of this year, Lucent will employ 45,000 people, down from 62,000 a year earlier and about half the number it employed at its peak.

Lucent blamed its decision to slice an additional 15% off its workforce on weak demand for its products rather than on its ballooning losses.

"The market continues to be very challenging," chief executive Patricia Russo said.

"Capital spending constraints have intensified and remained in place much longer than anyone would have predicted."

Sales during the April to June quarter fell 45% to about $3bn from about $5.4bn a year earlier. Sales fell 16% from the January to March quarter.

Its net loss more than doubled during the period from $3.24bn a year earlier.

Investor warning

Analysts responded to the news by urging investors to stay away, not just from Lucent but from the telecommunications industry as a whole.

"There's no reason to believe right now from these results that the industry has stabilised," Mr Lauria added.

"Telecom remains extremely speculative, and based on this I see no reason for investors to move into the space."

Lucent itself failed to beat down such gloom, declining to make any estimates about its performance during the next few months.

The company reiterated its goal to return to the black by the end of 2003.

Lucent shares have lost almost 90% of their value since the company embarked on a massive restructuring push in January 2001.

In early trading on Tuesday, the stock fell about 5%.