Nortel Networks to cut 3,200 more jobs
TORONTO -- Telecom equipment company Nortel Networks plans to cut its work force by 3,200 jobs worldwide, or more than 10% of its global work force, in an effort to restructure its operations while under court protection.
The Canada-based telecom equipment maker said Wednesday the new round of job cuts will be made over the next several months. The reduction is on top of 1,800 job cuts already announced.
Nortel filed for creditor protection Jan. 14 in Canada and the United States.
President and Chief Executive Mike Zafirovski said tough decisions are being made to restructure the company and work towards a successful emergence from creditor protection.
Nortel won't be paying severance to the employees who lose their jobs.
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 Networks 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 like 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. Zafirovski was hired in November 2005 to turn around the company.
Related Stories
ABC News Live