Nortel wields axe yet again

Networking vendor Nortel is to slash around 3,000 jobs in the next two years as part of its ongoing business transformation plan, it said last week.

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By  Administrator Published  February 14, 2007

Networking vendor Nortel is to slash around 3,000 jobs in the next two years as part of its ongoing business transformation plan, it said last week.

The company said the cuts, which are equivalent to 8.5% of its workforce, would mainly impact general and administrative areas of its business. Sales positions in growth areas will not be affected.

Nortel is also to shift some 1,000 positions to low-cost locations such as China, India and Mexico.

Nortel president and CEO Mike Zafirovski described the measures as “tough but necessary” and said the company hoped to re-deploy some of the affected employees to other areas. Nortel said it also planned to reduce its real estate portfolio.

The company said it expected to achieve US$400million in annual savings as a result of the measures, with around half of the savings to be realised in 2007.

Tim Watkins, Nortel president for Middle East, Turkey and Northern Europe, said the largest number of positions affected would be in the US and Canada and the 47 staff employed in the Middle East would not be impacted. “Dubai and the Middle East as a whole is a key growth engine for Nortel’s business,” he added.

This is the second time in less than a year that Nortel has announced an extensive reduction of staff. In July 2006 it unveiled plans to cut 1,900 jobs.

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