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To: Johnny Canuck who wrote (36789)	4/18/2002 8:53:45 PM
From: Johnny Canuck	Read Replies (1) \| Respond to of 68247

Nortel slashes jobs POSTED AT 7:27 PM EDT Thursday, April 18 By ROMA LUCIW Globe and Mail Update Nortel Networks Corp. announced Thursday it would cut 3,000 jobs as it met lowered earnings expectations, and provided little hope the current tech slump is over, saying that revenue will not improve in the next quarter. Over the past year, Nortel has chopped its global payroll in half — to about 47,000. It said that after cutting jobs related to European work council, joint venture activities, and non-core businesses, it would have a work force of 44,000. When the latest cuts are completed by the end of the second quarter, Nortel will have 50,000 fewer jobs than it had 16 months ago. On Thursday, the Brampton, Ont., based maker of telecom equipment posted earnings in line with its recently announced guidance. For the three months ended March, Nortel lost $841-million (U.S.) or 26 cents a share, compared with losses of $2.6-billion or 82 cents a share in the year ago period. Sales fell 49 per cent to $2.9-billion from $5.75-billion. "We expect our customers to continue to limit capital expenditures and, therefore, it is difficult to predict how spending patterns will unfold in 2002," Nortel's chief executive officer Frank Dunn said in a statement. "That being said, we do not expect a significant downturn or a significant upturn in our revenues for the second quarter compared to the first quarter of 2002." Pro forma net losses from continuing operations were $463-million or 14 cents a share, compared with $277-million of 9 cents in the same period of last year. Its pro forma losses, which included a $200-million writedown for obsolete equipment, hit 14 cents a share, slightly higher than estimates of a 13 cent loss. "We continue to expect ongoing improvements in our bottom line results as we move through 2002." The company said it will continue cutting costs to get to a break-even point of $3.5-billion in quarterly sales by the fourth quarter of 2002. That number does not including special costs including those related to acquisitions. Nortel's cash balance stood at $3.1-billion at the end of the quarter, down from $3.5-billion, because of losses, and capital spending. Including credit facilities, the company said it has $6.6-billion in liquidity. Nortel announced more than a week ago that it expected to miss expectations, and would report sales of about $2.9-billion. That figure, a remarkable sales tumble compared with previous years, does not include one-time charges linked to acquisitions and job cuts. Nortel's share price — which has been struggling for months — has climbed for the last four trading sessions, gaining $1.34 (Canadian) or 25.5 per cent on the Toronto Stock Exchange during that period. It closed down 4 per cent or 27 cents at $6.33 in regular trading Thursday. Nortel's three main business segments suffered substantial year over year declines in revenue, with wireless networks off 26 percent, metro and enterprise networks down 47 percent and optical long haul networks seeing a 77 percent slump. During a conference call with analysts, Mr. Dunn said Nortel will become "more and more a wireless company." He would not comment on rumours that Nortel and Motorola are planning to combine their wireless units. Mr. Dunn, who became Nortel's acting CFO after Terry Hungle was forced to resign in February, said the company will hire someone to fill that position in the next few months. He also said that companies in the telecom industry are living in interesting times, then added: "there are days this is nothing short of an endurance test." But Mr. Dunn said that although he does not expect a "robust" upturn in spending over the next few quarters, carriers are "firming up plans" for their networks. Nortel's main rivals, including Lucent Technologies Inc. of Murray Hill, N.J., and Cisco Systems Inc. of San Jose, Calif., have also made severe cuts over the past couple of years and may have to make more as the telecommunications industry continues to struggle. "The key to this Nortel story is not what Nortel says, but what Nortel customers say. The customers are saying we've seen some deterioration in the business recently," said Bear Stearns analyst Wojtek Uzdelewicz.