Nortel to Cut 7,000 More Jobs; 3rd-Qtr Sales to Miss Forecast
By Scott Lanman
Brampton, Ontario, Aug. 27 (Bloomberg) -- Nortel Networks Corp. will cut 7,000 more jobs by the end of the year and said third-quarter revenue will miss its forecast because of a decline in spending on equipment by U.S. telephone companies.
North America's second-biggest maker of telephone gear will reduce its workforce to 35,000, compared with a previous target of 42,000 by the end of September, spokeswoman Tina Warren said. Third-quarter sales will fall as much as 10 percent from the second quarter's $2.77 billion. Last month, Nortel said revenue would be about unchanged.
Sales are falling because some operators such as Global Crossing Ltd. have gone bankrupt, while survivors including Sprint Corp. are cutting spending to preserve cash. Nortel said in a statement the latest reductions will let the company return to profit, excluding certain expenses, with $2.6 billion in revenue, versus the earlier target of $3.2 billion.
Shares of Brampton, Ontario-based Nortel fell 6 cents to $1.23 at 6:42 p.m. in New York Stock Exchange composite trading. They've plunged 83 percent in the past year. |
