Nortel Networks Corp. is planning to cut another 7,000 workers as it continues to struggle to return to profitability in a weakened market for networking equipment.
The Brampton, Ontario, company announced this week that it now expects a decline of as much of 10 percent in revenues in its third quarter compared to the second quarter. It had originally projected that revenues would be "essentially flat," officials said in a statement. Nortel reiterated its goal of returning to profitability by the end of June of 2003.
To get there, the company is making further cuts in employees and facilities as well as conducting other streamlining of the business, according to a statement released Tuesday. The company offered few details on the cutbacks, saying the plans and costs associated with the restructuring are being finalized and will be provided with its third quarter results.
The job cuts will be completed by the fourth quarter of 2002 and should bring the number of workers down to 35,000. That is 7,000 fewer than was expected in July when the company announced its second quarter results. Nortel previously had announced it was trimming 3,500 jobs in its optical long haul business to help bring it down to 42,000 employees.
President and CEO frank Dunn primarily blamed further cutbacks in spending by service providers, especially in the United States, for the revised results and latest restructuring plan.
"The market environment continues to be challenging with lower spending levels than previously expected and a more prolonged industry transition," he said in a statement.