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Nortel eliminating jobs to hone high-growth areas

The network equipment maker cuts jobs in its Ottawa office and says it plans to eliminate positions over the next several months to sustain 2000 work force levels.

    Nortel Networks said Thursday it plans to eliminate some positions over the next several months, primarily in low-growth business areas, as part of a plan to sustain 2000 work force levels.

    "In general, we're focusing on our high-growth markets," said Vicki Contavespi, a Nortel spokeswoman. She said the company does not expect to increase its work force this year, but said the company would still continue to recruit.

    Various news outlets reported different numbers on Nortel's layoffs. A Nortel representative refused to disclose the exact number of layoffs at the networking concern, though the Wall Street Journal reported that the Canadian company would lay off 7 percent of its work force, or 5,200 employees.

    "This isn't indicative of any type of slowdown," Contavespi said. "It's re-jiggering the work force, aligning it with our high-growth areas such as fiber-optic networking and wireless equipment. The way we'll remain flat in 2001 is because a lot of the elimination of jobs will be due to normal attrition or retirement."

    The network equipment maker confirmed that some positions were eliminated Wednesday in its Ottawa office, but declined to specify the number of jobs affected. Contavespi also would not comment on the number of jobs that may be eliminated over the next several months. Nortel, based in Brampton, Ontario, employs roughly 90,000 workers worldwide.

    Positions in low-growth areas, such as pure voice-related products, will probably get eliminated, the company said. Nortel intends to help place affected employees in other areas of the company, along with providing them help with outplacement.

    The company, which competes with rivals Lucent Technologies and Cisco Systems in several areas of the networking equipment market, recently reassured the investment community that it plans to meet targets for its fourth quarter, as well as for fiscal 2000, first-quarter 2001 and fiscal 2001. Nortel is expected to report fourth-quarter earnings Jan. 18.

    Although the company beat last quarter's earnings expectations, it still announced sales growth of 90 percent in its optical network equipment unit, which was 30 percent to 35 percent less than some analysts' projections.

    Looking ahead for this year, Nortel has said it forecasts overall market growth in excess of 20 percent but expects to grow significantly faster than the market, with anticipated growth in revenue and earnings per share in the 30 percent to 35 percent range.