Thursday, February 28, 2008

Nortel is going down

NEW YORK (AP) -- Nortel Networks Corp. said Wednesday it will cut 2,100 jobs - about 6% of its work force - as it reported its fourth-quarter losses had widened, sending its shares tumbling.

The Canadian telecommunications equipment maker reported a loss of $844 million, or $1.70 per share, compared with a loss of $80 million, or 19 cents per share, a year earlier.

Analysts polled by Thomson Financial had predicted earnings of 57 cents per share, though such estimates typically exclude one-time charges, like those recorded by Nortel as it restructures.

The company took $38 million in charges associated with its restructuring programs, compared with $29 million, a year earlier. It recorded a $1.06 billion charge related to changes in its Canadian tax profile.

Nortel said it plans to cut about 2,100 jobs globally and will shift about 1,000 additional jobs to lower-cost countries in Asia and Europe. The company has just over 30,000 employees now, down from almost 100,000 before the tech bust in 2000.

Mike Zafirovski, Nortel's president and CEO, said the company faces a "challenging environment" and said the economic slowdown in the U.S. is affecting business.

"There is some concern over it's impact in the rest of the world. From our perspective, in our outlook in 2008, it's pretty flat revenue on the carrier side, which is about half of our business," Zafirovski said in a telephone interview.

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