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Nortel to Cut 4,000 More Jobs
Nortel Networks will cut 4,000 more jobs than planned, as a result of "a faster and more severe economic downturn in the United States," the Canadian high-tech company said Thursday.
That will bring the company's total job cuts to 10,000 for this year, a situation that indicates a high-tech recession, if not a recession for the overall economy, according to some Canadian analysts.
The surprise announcement came after regular trading, with Nortel's shares and those of other fiber-optic companies falling on after-hours markets and expected to suffer a further battering Friday.
Nortel's chief executive John Roth said he expects first- quarter revenues to be at 6.3 billion U.S. dollars, much lower than his earlier projection of at least 8.1 billion dollars.
"We are seeing longer than expected delays in spending by our U. S. customers as they continue to assess the impact of the economic and market conditions on their businesses," he said in a press release.
"We now expect the U.S. market slowdown to continue well into the fourth quarter of 2001," he warned.
But he reaffirmed "Nortel Networks overall health and our market leadership positions," noting: "There should be no confusing the current economic downturn in the United States and the adjustment we are announcing today."
He said the continued solid growth in the Asia Pacific and Latin America would partially offset the impact of the U.S. slowdown.
Nortel has seen its shares downgrade by half in value since it announced that its revenues fell just shy of expectations for the third quarter last year. The fiber optics giant, which then accounted for more than 30 percent of the Toronto Stock Market's key 300 index, triggered the market's worst drop of 840 points in one day.
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