Nortel axes 10,000 more jobs
Posts $19.2bn Q2 loss
Nortel Networks is to cull 10,000 jobs by the end of September, it announced today.
The massive job cuts are on top of the 20,000 losses announced in April and appeasr to show there is no end in sight as the sector cntinues to suffer.
The cuts are part of a massive restructuring exercise blamed on "significant adjustment" in the global telecoms market.
It seems companies are continuing to cut back on the Net-enabling equipment.
Nortel claims that the cuts will save the company $875 (before tax) a quarter - $3.5 billion a year.
The company also announced today that it had secured an additional $2 billion in funding. It also intends to suspend share dividends to help stem the cash haemmorage in the hope of saving more cash.
In a statement, the said it expects to generate a net loss of $1.5 billion in Q2 on revenues of $4.5 billion.
"Combining the operations outlook for the quarter and the impact of the alignment plan, the company expects a net loss of approximately US$19.2 billion in the second quarter," the company said.
John Roth, president and CEO, said: "Led by the United States, the global telecom industry is undergoing a significant adjustment.
"After several years of capital expansion exceeding the pace of business performance, the capital markets have significantly reduced the flow of funds to service providers.
"In response, service providers have made driving return on invested capital their primary focus. Consequently, new capital expenditures are being curtailed as service providers look to drive further efficiencies from the investments they have already made.
"As a result, we are seeing a very significant reduction in equipment purchases in the second quarter of 2001 compared to the first quarter of 2001 and the second quarter of 2000," he said. ®