Nortel cuts loose 4,000 employees

By Jim Duffy
Network World Fusion, 01/11/01

Nortel Networks Thursday said it is eliminating 4,000 jobs as part of "streamlining and realignment activities."

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The cuts are due to overlap from several acquisitions Nortel has made over the past year, according to several sources. They also are due to aligning resources on high-growth markets such as optical and wireless networking, and Internet and e-business initiatives.

"This will result in the ongoing alignment of its business and workforce with high-growth markets, stemming initiatives and organizations that are not in line with this direction," Nortel said in a statement.

Nortel's enterprise business has been the laggard in the company's growth. Growth in Nortel's enterprise business has been in the mid- to low single digits, while other initiatives have experienced high double- and even triple-digit growth in recent quarters.

Reports surfaced Thursday that up to 80 of the 4,000 positions eliminated are from the cancellation of Nortel's BayStack 350 LAN switch product line. A Nortel spokesman could not confirm this.

Nortel said it expects its overall number of employees to remain unchanged in 2001. The company's regular full-time workforce, including joint-venture employees, was approximately 94,500 at the end of last year, up from approximately 83,500 at the start of 2000.

The job cuts will enable Nortel to continue to hire this year "to address customer needs and drive leadership in high-growth markets," the company said.

"In 2000, we added critical resources to further enhance our responsiveness to customers and laser-like focus on the high-growth areas of their businesses, where demand is most robust," said Clarence Chandran, Nortel's chief operating officer, in a statement. "In 2001, hiring to address high-growth markets will remain a priority."

Affected employees will be offered severance and outplacement services, the company said.

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