Nortel Networks to cut 3500 jobs

Telecomms giant Nortel Networks will cut as many as 3500 jobs from its optical long-haul business and may sell off its optical components business.

A spokesperson for Nortel Networks Australia said the moves in the optical components business will have no impact on local operations as there is no optical components business here.

In a prepared statement the company said it expects revenues in the second quarter of 2002 to be flat to down 5 per cent, compared to the first quarter of 2002, updating its previous sequential revenue guidance of "not significantly up or down".

Nortel also announced plans to further realign its optical long haul business, including optical components, to the current market conditions given that it does not expect a meaningful recovery in the long haul optical market before late 2003 or early 2004.

The company plans to streamline the business and focus on the capabilities that will be required when increased spending in the long-haul optical market is expected to resume, including optical switching, next generation photonic transport capabilities and end-to-end network management and intelligence.

The plan includes the potential sale and/or resizing of the optical components business.

"We are aligning our optical business model to where we see the industry going to ensure we are well positioned when spending resumes," said Frank Dunn, president and chief executive officer, Nortel Networks in the US.

According to the statement, the realignment of the optical long haul business, including optical components, is expected to be completed by the end of the third quarter of 2002 and is expected to impact about 3500 related positions.

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