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Chapter 376 The Survival of Bell Labs

As loan funds from major commercial banks gradually arrived, Ernst and the core team of Ernst Asset Management were secretly discussing how to facilitate the flow of this huge sum of money into the target market in a more secure and discreet manner.

Inside Lucent's headquarters in New Jersey, a crucial meeting that would determine the company's future was being held in a somber atmosphere.

At the door of the meeting room, Karl Weller's right hand gripped the cold brass doorknob tightly, his knuckles turning slightly white from the force, and the cold sweat seeping from his palm left faint damp marks on the doorknob.

The red circle logo engraved on the brass handle is a corporate symbol that AT&T has been proud of since its inception, symbolizing the company's outstanding position and innovative spirit in the telecommunications field.

However, at this moment, in Carl Weller's eyes, this familiar logo was like a scorching brand about to explode.

"Dr. Weller, all the board members are present and we are just waiting for you." The calm, emotionless voice of Lucent CEO Rich McKinney's secretary came from beside him. The voice was as cold as a robot, without any emotional fluctuation, and instantly interrupted Carl Weller's thoughts.

Carl Weller slowly came to his senses, forced a bitter smile onto his face, and slowly pushed open the wooden door of the conference room.

At the end of the long table, Richie McKinney's long fingers tapped lightly on the smooth conference surface. Upon seeing Carl Weller, he pointed to an empty seat on one side of the table and, before Carl Weller was even fully seated, said, "Now that everyone is here, let's officially begin the meeting."

"According to the first quarter financial statements, Bell Labs' R&D expenditure accounted for more than 12% of its revenue, which is more than double the industry average. The company's shareholders expressed strong dissatisfaction with this and unanimously believed that Bell Labs' R&D expenditure must be further reduced in order to optimize the company's overall capital al__cpLocation."

Upon hearing this, Carl Weller subconsciously touched a small transistor model armband on his cuff.

These are a batch of commemorative armbands commissioned by John Bardeen, the 1956 Nobel laureate, to commemorate his Nobel Prize in Physics.

In addition to gifting them to close friends and partners, Bardeen also left some of the armbands to Bell Labs. Every subsequent director of Bell Labs will receive one. This is not only a recognition of the past directors, but also a symbol of Bell Labs' enduring spirit of innovation and a testament to the laboratory's technological foundation and scientific pursuit.

More than 20 years ago, when Karl Weller first joined Bell Labs, it was a research paradise that countless scientists dreamed of.

At that time, Bell Labs had more than 100,000 scientists and related technical personnel, and invested hundreds of billions of dollars in research and development every year. It made breakthroughs in many fields such as communication technology, computer science, and physics, and promoted the development of the global science and technology industry.

What now?

Bell Labs' staff has shrunk to around 20,000, and its R&D funding has decreased by more than ten times compared to its peak.

Many people who were originally dedicated to cutting-edge scientific research projects are now only able to engage in basic technical research and data processing. Many forward-looking scientific research projects have been forced to be shelved due to a lack of funding. The once vibrant and innovative research mecca has gradually been shrouded in a shadow of silence.

However, the company's management and shareholders still believed that Bell Labs' expenses were too high and wanted to continue to reduce R&D investment, which filled Carl Weller with helplessness and indignation.

Carl Weller took a deep breath, attempting to defend Bell Labs' R&D investment: "Although Bell Labs' R&D investment ratio is higher than that of other companies in the industry, it is undeniable that we have also achieved remarkable results."

"Over the past five years, we have contributed more than 1200 core patents to the company, covering multiple key areas such as communication technology and semiconductor materials. Moreover, the licensing of these technology patents is gradually bringing... "

"This will lead to continued losses." Before Carl Weller could finish speaking, he was rudely interrupted by CFO Hart.

He pushed a thick financial report in front of Carl Weller: "Take last year's data as an example. Bell Labs' patent licensing revenue was only $4200 million, while the investment in maintaining the daily operation of the laboratory and R&D projects during the same period exceeded $3 million. The gap between input and output is huge."

"We are borrowing money to our customers to buy our equipment to maintain revenue, and we simply cannot afford to support this technological mecca, or rather, it has already hindered Lucent's development."

Hart's every word was like a sharp blade, piercing Karl Weller's unwavering commitment to Bell Labs.

"But we also created irreplaceable value for Lucent's development. If it weren't for Bell Labs' continuous technological research and innovation, how could Lucent have maintained its monopoly on the US telecommunications equipment market and its leading position in the industry?" Carl Weller argued, trying to make the board members present realize the importance of Bell Labs to the company.

Hart did not deny the contributions Bell Labs had made to Lucent, but a hint of sarcasm appeared on his face, as if he felt that Bell Labs' achievements were a given.

"Do I need to have a serious discussion with you about Bell Labs' personnel salaries?" This was Lucent's biggest complaint about Bell Labs.

With an overstaffed workforce and excessively high labor costs, Lucent's management believed that the company simply did not need such a large research team.

Bell Labs alone spends over a billion dollars annually on personnel salaries, putting enormous pressure on the company's finances.

If Lucent had invested that billion dollars in payroll into market expansion, its annual revenue could have grown by at least another 10%.

Hart's tone grew even colder, carrying a clear accusation: "You simply don't care about Lucent's overall development, and you haven't invested more R&D funds in the core technology development of telecommunications equipment."

"Huawei's optical transmission equipment has successfully entered the international market since last year, and its products are 30% cheaper than ours. Nortel's switch products are also actively expanding into the European market, which has had a serious impact on our traditional market."

"In this competitive market environment, Bell Labs' research and development direction is severely out of sync with the company's strategic needs. Isn't this a dereliction of duty on your part?"

"Do you know how Wall Street analysts describe you? They say Bell Labs is Lucent's aortic aneurysm, seemingly an important part of the company, but in reality, it could trigger a fatal crisis at any time and drag down the entire company's development."

Hart's words were like the final boulder, completely crushing Carl Weller's last line of defense and tearing away the last fig leaf between the two sides.

If it weren't for Carl Weller's extremely high reputation in academia and the support of more than 20,000 researchers at Bell Labs, Hart would probably have already pointed his finger at him and started cursing him.

Faced with Hart's accusations, Carl Weller could no longer remain calm, and he retorted vehemently, "Is all of this our fault?"

"When we invented the UNIX operating system in 1969, the company never considered the return on investment. But now 90% of the world's servers use UNIX and its derivative Linux. Doesn't that prove Bell Labs' value?"

A representative from the marketing department immediately stepped forward, clearly unwilling to take the blame: "I admit that the marketing department did not recognize the market value of the UNIX operating system in time, which was a mistake on our part. However, Texas Instruments later offered $8 million to acquire the core patents of the UNIX system. This deal could have brought the company substantial profits. Who obstructed it, causing the deal to ultimately fall through?"

Carl Weller glared angrily at the other party. "Bell Labs is not a patent warehouse. Our mission is to advance science and technology, not to gain short-term profits by selling core patents. Since the founding of Bell Labs, there has never been a tradition of selling core technology patents."

"Why can't you reflect on your own problems? It is precisely because you have not paid enough attention to Bell Labs' technological research and development work, lacked a deep understanding of the value of the patents held by the lab, and lacked systematic thinking and planning on how to transform technological achievements into market products that the current situation has been created."

Carl Weller's words were filled with disappointment and heartache. He maintained that Bell Labs' current predicament stemmed more from strategic decision-making errors by the company's management than from problems within the research team.

"So we are now taking remedial measures for past mistakes. The company requires you to concentrate all R&D funds on the core technology development of telecommunications equipment, instead of wasting them on impractical cutting-edge scientific research projects that have no real contribution to the development of human society." The marketing representative did not back down.

Carl Weller couldn't believe his ears. The other party had described Bell Labs' cutting-edge research projects as unrealistic and empty rhetoric that made no contribution to humanity. This was a denial of the hard work of countless researchers.

He said with great sorrow, "When Claude Shannon proposed information theory at Bell Labs in 1948, who could have predicted that this theory would become the mathematical foundation of today's Internet technology? And who can guarantee that the quantum computing technology we are currently developing will not become the core force driving the global technological revolution and bringing about disruptive changes to human society in ten years?"

"Ten years from now, Lucent may be bankrupt," Hart interrupted Carl Weller impatiently, clearly unwilling to continue discussing topics that offered no help to the company's current development.

He looked at the other person with unwavering eyes and coldly issued his ultimatum: "Bell Labs now has only two options: either lay off staff, retain a quarter of the research personnel, and devote all research and development efforts to telecommunications-related fields."

"Second, we will sell ourselves. If you do not agree to the first option, we will sell Bell Labs as a whole."

"Sell?" Carl Weller stood up from his seat in shock, his voice filled with disbelief and anger. "You're destroying the century-old foundation of Bell Labs' scientific research! You're burying the hard work and dreams of countless scientists! Aren't you afraid that Alexander Graham Bell will rise from his grave, questioning why you've trampled on the scientific work he founded, and then strangle you?"