Networking equipment maker reduces layoffs by 250, as it details plans to cut expenses
During its twice monthly financial update to investors, the company said it will cut 3,250 jobs, 250 fewer than it had predicted last month.
Nortel also plans to trim its real estate holdings by about 2 million square feet of building space. It expects these cuts to cost about $450 million. Earlier it estimated the cost to be around $400 million.
Nortel is slashing spending in the face of increased competition from competitors at home and abroad. The company is also in the middle of an accounting scandal that is forcing it to restate earnings from 2000 to 2003. Earlier this month, Nortel disappointed investors when it indicated that sales in the current quarter were growing slower than the market.
In addition to battling companies such as Alcatel, Lucent Technologies and Cisco Systems, Nortel also faces stiff competition from Chinese manufacturers, like Huawei Technologies.
Nortel had already slashed its workforce by about 60,000 over the past three years. Currently, the company employs 36,000 people worldwide. Most of the most recent reductions will be in North America, the company said. About 1,400 jobs will be cut from the United States and 950 in Canada, it said. The company will also lay off 650 workers in Europe, the Middle East and Africa, and 250 in other regions.