New CEO for Nortel, 10,000 more jobs to go

The axe continues to swing at Nortel, with the announcement of a further 10,000 job cuts to be made this quarter. The networking hardware vendor will shed the jobs, which are in addition to losses already announced this year, as part of another adjustment in cost structure.

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By  Mark Sutton Published  October 3, 2001

The axe continues to swing at Nortel, with the announcement of a further 10,000 job cuts to be made this quarter. The networking hardware vendor will shed the jobs, which are in addition to losses already announced this year, as part of another adjustment in cost structure. The company expects a loss of $3.6 billion for the third quarter.

The losses will reduce Nortel’s total workforce to around 45,000. The vendor has changed its cost structure for a break-even point of $4 billion per quarter, as opposed to the $5 billion mark that had been planned for previously. Revenue for the third quarter is predicted to be $3.5 billion.

The company has also announced management changes. Current CEO and president John Roth will shift to vice president ahead of his retirement in April 2002. CFO Frank Dunn, who has been with Nortel for 25 years, will take over from him.

"While the magnitude of the market adjustment from previous levels of expenditures has been challenging, we believe we are beginning to see some early signs that the expected capital spending by service providers is approaching sustainable levels," said Roth.

"Nortel Networks has made excellent progress on our work plan to drive towards breakeven and positive cash flow. In light of the current levels of expected industry spending, we are adjusting our work plan and targeting a cost structure, expected to be in place during the first quarter of 2002, to drive breakeven at a quarterly revenue level well below $4 billion, instead of the $5 billion quarterly revenue level outlined previously," he continued. "As we do this, we will continue to invest to drive leadership in three key areas of focus: Optical Long Haul Networks; Wireless Networks; and Metro Networks."

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