Nortel cuts jobs worldwide and restructures operations

Nortel is to slash 1,900 jobs worldwide as part of a massive cost-cutting exercise that will save the company US$175million by 2008.

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By  Diana Milne Published  July 9, 2006

Nortel is to slash 1,900 jobs worldwide as part of a massive cost-cutting exercise that will save the company US$175million by 2008. The moves are part of CEO Mike Zafirovski’s plan to turn the company around after it suffered a US$2.58 billion loss in 2005. Nortel will eliminate 350 middle management positions, 350 further positions as a result of consolidating business units and 1,200 operational jobs and will make changes to employees’ pension plans. It then plans to open two Nortel Operations Centers of Excellence in Turkey and Mexico and to consolidate 100 of its existing operations centres worldwide. Ben Roome, manager of corporate communications for Nortel EMEA, said he could not guarantee that job cuts would not take place in the Middle East region. “All of them could be anywhere in the world. We operate in 150 different countries. I can’t make any cast iron guarantees,” he admitted. However he added that the Middle East is a growing market for Nortel and one where experts were needed on the ground. “We are increasing the amount of business we are doing in the Middle East. We are looking to grow it significantly year-on-year and we wouldn’t be able to do that by reducing the number of people there,” he said. “If anything we need to grow our business there and having expertise and operational excellence on the ground, sales engineers, sales people who are able to provide that communications and network expertise, is absolutely vital to the Middle East, ” he added. He said the company’s restructuring plan was partly owing to a decision by Zafirovski to ensure that there were only ever six layers of management between him and the most junior person in the company. However, it is also to make up for the significant losses that Nortel has made in recent years.

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