Nortel to lay off 10 percent of staff

Nortel Networks will cut 10 percent of its workforce, or around 3,500 jobs, to reduce costs.

The cuts will mainly affect middle management, President and Chief Executive Officer Bill Owens said Thursday in a conference call with journalists.

The staff cuts will cost between US$300 million and US$400 million, and should result in annual cost savings of US$450 million to US$500 million, the company said in a statement. The cuts should be complete by the end of the year, it said.

The company also announced preliminary estimated financial results for the first half of this year. Estimated revenue for the half year totalled around US$5.1 billion, split evenly between the first two quarters, Chief Financial Officer Bill Kerr said in the same conference call. He estimated net earnings per share for the half-year at between zero and US$0.02, split evenly between the two quarters.

Nortel expects to file full reports for the first two quarters of 2004, and restated quarterly reports for the whole of 2003, by the end of September, it said. The company is being investigated by the Ontario Securities Commission and the US Securities and Exchange Commission regarding restatement of results as far back as 2001.

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