Nortel job cuts to reach 3,500?
From the Ottawa Sun
By STUART McCARTHY -- Business Editor
Nortel employees worldwide are bracing for cuts that could
reach as high as 3,500.
The move is expected to be announced Wednesday, although
company officials refused to confirm or deny the cuts.
"It is Nortel's policy to not comment on rumours," said corporate
spokesman Peter Janecek at headquarters in Brampton.
In Ottawa, where the number of jobs on the line is estimated at
300 to 400, spokesman Jacques Guerette also would "not
comment on rumours."
The word first hit outside Nortel late this past week when a
paper in Raleigh, N.C., in the Research Triangle Park area where
Nortel has major facilities, reported that area would absorb the
hit.
Nortel officials inside the company put out the word to selected
staff that there were cuts, but they would be worldwide.
"It will be 10% of PCN (the Public Carrier Networks) division,"
a staffer said. The PCN unit accounts for about half of Nortel's
staff worldwide. It is one of the oldest lines of business, and deals
with the traditional telephone networks.
Nortel employs about 85,000 people worldwide, of which about
13,000 are in the Ottawa area.
Nortel recently changed its focus to "Webtone," which is also
referred to as voice-over IP (Internet Protocol). The philosophy
is communications of the future will be almost completely based
on the Internet structure.
To position itself for that environment, Nortel acquired IP
network-related companies, culminating with the $7 billion US
acquisition of Bay Networks earlier this month.
That deal added more than 8,000 IP-experienced staff to Nortel
and saw Bay Networks chief executive officer Dave House take
over as Nortel's president. He also shares the CEO duties at
Nortel with vice-chairman John Roth.
Nortel has also decided the Boston area will be headquarters for
its new IP-based operations aimed at carrier-level networks.
The local cuts are expected to have minimal impact on
operations in Ottawa, which is the company's global research and
development headquarters.
Guerette said massive hirings have offset the cuts.
In the past 18 months, Nortel has added 3,000 staff to a local
workforce of 10,000-plus. The original plan called for 5,000
hires over a four-year period.
"We're well ahead of schedule on that," said Guerette.
Nortel is in the middle of a $250-million expansion largely
centred at the Carling Ave. campus.
Guerette said construction "is about a month behind schedule"
because of a variety of trade strikes in the commercial
construction area. Plans are in place to start moving into the new
facilities in the next couple of months.
Meanwhile, Janecek confirmed the company is looking to
change its name to recognize the impact of the addition of Bay
Networks.
Since the acquisition, the company has said Bay would operate
as a subsidiary of Nortel. Press releases have been headed
"Nortel/Bay Networks."
But insiders say that is expected to be replaced simply by
"Nortel Networks" before the end of the year.
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