Nortel Cuts Jobs, Lowers Break-Even Point

Telecoms equipment maker Nortel Networks said on Tuesday it would slash 15,000 more jobs from its payroll and record a $3.6 billion loss in its third quarter as it adjusts its operations to allow it to break even at a quarterly revenue level well below $4 billion.

Brampton, Ontario-based Nortel said in a statement after the close of markets on Tuesday that it expects third-quarter revenue from continuing operations of about $3.5 billion, and a loss, excluding charges, of about $910 million.

The company said it will record incremental charges of $1.3 billion, restructuring charges of $735 million, and charges for amortization of assets of $650 million, for an after-tax net loss of $3.6 billion in the third quarter.

Nortel's work force, already at two-thirds of an original 90,000 before the slowdown in telecommunications network spending, will be reduced to 45,000, with the majority of employees expected to be contacted by Oct. 31.

By the first quarter of 2002, Nortel said it will have a cost structure that allows it to break even at a quarterly revenue level below $4 billion, instead of the previous $5 billion.