Nortel to lose $19.2b in Q2 and cut 10,000 more jobs

Nortel Networks Corp. forecasts a quarterly net loss of around US$19.2 billion, and a net loss on operations of $1.5 billion based on revenue from continuing operations of $4.5 billion in the second quarter of 2001, the company said Friday. The company also said it plans to cut 10,000 more positions by September, bringing the total headcount reduction for this year to 30,000.

Nortel said it plans to withdraw from the access products business, and has implemented cost-saving programs which it expects will save it $3.5 billion annually, it said in a statement.

The company also will cease paying dividends after an already-declared dividend of $0.01875 per common share has been paid on June 29.

The sharp downturn in Nortel's results is due to a spending freeze by telecommunications service providers, which are trying to squeeze more out of their existing equipment investments, Nortel President and CEO John Roth said in a statement.

The forecast net loss includes an adjustment to the value of intangible assets of $12.3 billion in connection with the acquisitions of Alteon WebSystems Inc., Xros Inc., Qtera Corp. and JDS Uniphase Corp.'s 980 nanometer pump-laser chip business.

"The result of this action adjusts the asset value on our books for these stock for stock acquisitions to reflect current market valuations, or in other words, it is the equivalent of having made these acquisitions at the current stock prices," Roth said, according to the statement.

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