Nortel sheds 1,300 jobs as losses mount

[ErickMontreal]

Nortel sheds 1,300 jobs as losses mount

 

Bert Hill, Canwest News Service

Published: 3 hours ago

 

OTTAWA - Nortel Networks announced 1,300 more layoffs Monday, the departure of several top executives, and pay and hiring freezes as it struggles with tough economic conditions and internal trouble.

 

The company also announced big write-downs of assets and other costs, which drove losses to $3.41 billion in the third quarter ending in September, compared to a profit of $27 million a year earlier and almost 30 times the losses of $113 million in the June quarter.

 

Sales fell 14 per cent to $2.32 billion and the company warned that overall sales for the full year will fall by four per cent, at the low end of a major warning announcement in September.

 

Nortel said that chief technology officer John Roese will leave the company Jan. 1. He is the top executive responsible for the 4,600-employee Ottawa operation.

 

Other people leaving include chief marketing officer Lauren Flaherty, global services president Dietmar Wendt, executive vice-president global sales Bill Nelson and chief legal officer David Drinkwater.

 

In addition to more than 2,000 job cuts announced earlier this year, Nortel said another 1,300 jobs will be eliminated, with 25 per cent of the cuts this year and the balance in 2009. Nortel said that 1,200 jobs still have to go from the earlier rounds of layoffs.

 

"In September, we signalled our view that a slowdown in the market was taking place. In the weeks since, we have seen worsening economic conditions, together with extreme volatility in the financial, foreign exchange and credit markets globally, further impacting the industry, Nortel and its customers," said chief executive officer Mike Zafirovski.

 

"We are therefore taking further decisive actions in an environment of decreased visibility and customer spending levels."