Troubled kit maker Alcatel-Lucent said Tuesday it is losing two key figures, its chief executive and its chairman, as it continues to battle its merger woes.

CEO Pat Russo will step down no later than the end of the year but will continue to run the company until a new leader is in place.

Chairman Serge Tchuruk has decided to step down on October 1, as the company shrinks the size of its board, which will also see the departure of ex-Lucent chief Henry Schacht.

The company also announced its sixth consecutive quarterly loss, which increased to Eur222m in the second quarter compared to Eur95m in the first quarter, but shrank from a loss of Eur336m in the second quarter of last year.

Quarterly revenues also dropped 5.2 per cent to Eur4.1bn, from Eur4.3bn in the second quarter of 2007, impacted by a decline in the carrier equipment market.

Russo said that during the quarter, CDMA activity declined at a higher pace than the company had expected, due to a large extent to a reduction in the capital expenditure of a key customer in North America. It could be that this weakness intensifies as the two big CDMA players in the US, Verizon and Sprint go down the LTE and WiMAX routes respectively.

Commenting on her departure, Russo said that the post merger realignment strategy is beginning to deliver results, but added, “I believe it is the right time for me to step down. The company will benefit from new leadership aligned with a newly composed board to bring a fresh and independent perspective that will take Alcatel-Lucent to its next level of growth and development in a rapidly changing global market.”