Nortel Networks to cut 3,200 more jobs
NEW YORK (AP) – Bankrupt telecom equipment company Nortel Networks Corp. plans to cut its workforce by 3,200 jobs worldwide.
The Canada-based telecom equipment maker said Wednesday that the new round of job cuts will be made over the next several months. The reduction is on top of the 1,800 job cuts already announced.
Nortel filed for creditor protection Jan. 14 in Canada and the United States (story here); the company also announced in January that it would exit the mobile WiMAX business, ending a venture it had with Alvarion (story here).
President and Chief Executive Mike Zafirovski said tough decisions are being made to restructure the company and work toward a successful emergence from creditor protection.
Nortel currently employs about 30,000 people around the world, including 5,800 at Canadian operations in Ottawa and Toronto.
The company also said its board has approved management's recommendation to eliminate bonuses for 2008. Nortel says it is seeking Canadian court approval to end its equity-based compensation plans.
Facing a sharp drop in orders from phone companies, Nortel used the bankruptcy filings to buy time to explore restructuring options, such as selling off assets.
During the 1990s telecom and Internet boom, Nortel had more than 95,000 employees. At one point in 2000, it accounted for one-third of the market value on the entire Toronto Stock Exchange.
After the dot-com bust, Nortel had problems of its own: an accounting crisis that sparked shareholder lawsuits, regulatory investigations and the firing of key executives, including CEO Frank Dunn.