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Nortel to shed 3,500 jobs in optical components sell off

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Nortel has announced plans to shed a further 3,500 jobs and plans to sell off its optical components division.

The news comes as the struggling telecommunications equipment provider warned that Q2 revenues would be "be flat-to-down 5 percent", compared to Q1 2002. Previously Nortel said there would be little significant change in its revenues this quarter but the continuing slump in the telecoms sector has forced it to trim back its estimates even further.

The Canadian company does not expect a "meaningful recovery" in the long-haul optical market until late 2003, so it has decided to focus on optical switching (the first segment of the market it expects to recover) and sell off its optical components business. The sale is expected to result in Nortel shrinking its headcount by 3,500 in addition to its previously announced job loses, which together mean the company will employ only 44,000 people. In January 2000, 94,500 worked for Nortel.

Nortel hopes the painful process of restructuring will allow it to return to break even on quarterly revenues of $3.2 billion by Q4 2002. ®

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