The chairman and CEO of French telecommunications giant Alcatel-Lucent will both resign later this year, the company said Tuesday, as stagnant demand from operators and the weak dollar combined to foil the promises of its merger more than two years ago.

The announcement of the departures of Chairman Serge Tchuruk and Chief Executive Patricia Russo came as the world's largest fixed and mobile telecom gear maker reported its sixth consecutive quarter of losses.

Tchuruk will step down Oct. 1, and Russo will resign "no later than the end of the year," the company said in a statement, adding that the search for replacements is to begin immediately.

Alcatel-Lucent (LU) reported a net loss of 1.1 billion euros ($1.73 billion) for the second quarter after taking a euro810 million ($1.3 billion) goodwill writedown, compared to a net loss of euro586 million a year earlier.

The company, which was formed through the 2006 merger of France's Alcatel and the U.S.-based Lucent, is in the middle of a painful restructuring that foresees 16,500 job cuts.

In its statement, the company quoted Tchuruk, Alcatel's longtime chairman and CEO before the merger saw him take on the non-executive chairman role, as saying the resignations were aimed at giving Alcatel-Lucent "a personality of its own, independent from its two predecessors."

Russo was quoted as saying that although she was "pleased" with the company's progress, "the company will benefit from new leadership ... to bring a fresh and independent perspective."

When conceived, the Alcatel-Lucent merger was designed to boost margins through cost and research and development savings, while improving the joint company's pricing power with telecom operators, its largest customers.

But intense competition in the industry means many of the savings have been used on discounts passed on to customers.

Russo had survived calls for her resignation at Alcatel-Lucent's annual shareholder meeting in May, where she was barraged with jeers and whistles by investors furious over the company's performance. Alcatel-Lucent's stock price has fallen by over three-fifths since the merger, and the company has yet to post a profit.

Russo was criticized by shareholders not only for the shares' slide, but also for her demeanor, her inability to speak French and, above all, her salary. In 2007, she was paid euro1.8 million ($2.79 million) including benefits.

In Tuesday's statement, the company confirmed its outlook for the rest of the year, which forecasts an adjusted operating margin in the low- to mid-single digit range and an adjusted gross margin in the mid-thirties. It also said it continues to expect revenue to decline in the low- to mid-single digit range.

Alcatel-Lucent makes about half of its sales in U.S. dollar or dollar-linked currencies and has suffered from the U.S. currency's weakness against the euro.

In the second quarter Alcatel-Lucent reported revenue of euro4.1 billion ($6.5 billion), down 5.2% from euro4.3 billion ($6.8 billion) a year earlier. Excluding the foreign exchange impact, sales were up 1.7%, Alcatel-Lucent said. Sales will stagnate or decline slightly in the third quarter, the company added.

The company warned that a spending slowdown by telecom carriers which began in the U.S. could move to European operators but that this was being offset by stronger-than-expected demand for mobile telecom gear in Asia and strong demand for services such as network operation and integration.

Overall, the company still expects the telecom equipment and service market to be flat this year, in line with the forecast of rival equipment makers like LM Ericsson of Sweden.

"Over the past three months, the global macroeconomic environment has further deteriorated and the economic slowdown has begun to spread to Europe," Russo said in the statement. "Although not evident yet, we believe this could impact somewhat the capital expenditure decisions of certain European customers, especially in fixed access."