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Nortel Networks is shutting down two of its English offices as part its wider plan to restructure its business after disappointing sales that have pushed it into the red.

The Canadian networking firm is looking for a buyer for a research and development unit in Camberley, Surrey. Failure to sell this small division by Nortel will mean that 35 people will lose their jobs.

Another office in Camberley, that of Nortel Networks eBusiness Solutions (formerly Periphonics), is to be relocated to Galway, Ireland with the loss of 15 jobs.

A Nortel spokesman admitted 50 people in total could be made redundant because of the moves. He said the decision to close the offices was a difficult one but necessary in the context of focusing Nortel's business on high growth areas.

Weak sales of networking kit, particularly to service providers, mean that Nortel has had to introduce a series of cost cutting measures which are expected to involve the loss of 15,000 jobs by the middle of this year.

The general downturn in the networking economy and a string of bankruptcies among second-string US telcos, who'd been sold kit by the likes of Cisco and Lucent financed by loans which have now fallen through, has hit major equipment suppliers hard.

Yesterday electronics manufacturing firm Solectron Corporation announced it had acquired Cisco's optical modules manufacturing capabilities in South Carolina, which it relocate to North Carolina. After the move Solectron will manufacture Dense Wave Division Multiplexing (DWDM) kit for Cisco to incorporate in its high-end routers.

The deal is part of Cisco's plans to cut headcount by up to 8,000 and means that for the first time the highly acquisitive Borg-like firm is hiving off parts of its business. ®

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