Nortel cuts another 5,000 jobs

Nortel Networks said it would cut another 5,000 jobs this year as the industry slump continues to take its toll on the company.

Nortel will cut a total of 20,000 jobs by mid-year. The company announced a 15,000-headcount reduction over the past two months and disclosed another 5,000 Thursday when it released second-quarter 2001 results.

For the quarter, Nortel recorded a loss of 12 cents per share, a penny more than the 11 cent per share loss analysts expected. The company posted revenue of $6.18 billion for the quarter, a little better than consensus analyst estimates of $6.1 billion.

Revenues for the second quarter of 2000 were $6.32 billion and earnings during that period were 12 cents per share.

"Our revenues in the quarter reflected reduced capital spending by service providers and enterprises, resulting from tighter capital markets and a severe slowdown in the U.S. economy," said John Roth, president and CEO of Nortel, in a statement. "The lack of available funding from the capital markets, high debt levels at many service providers and the compounding effect of the U.S. economic downturn and its impact on other regions will continue to constrain capital spending by service providers."

Given the uncertainty of these events, Nortel will not provide specific financial guidance for the next quarter or full year, Roth stated.