Nortel to cut 1,300 jobs on $3.4 billion loss

Nortel Networks has already been through its share of tough times, but the long-time Canadian technology supplier again took it on the chin in the third quarter, reporting that ongoing economic and competitive pressure and declining carrier spending pushed it to a revenue drop and a $3.41 billion loss. Nortel also said it will cut 1,300 jobs, and freeze salaries and hiring. In addition, several executives will depart, including Chief Marketing Officer Lauren Flaherty, Chief Technology Officer John Roese, Global Services President Dietmar Wendt and Executive Vice President Global Sales Bill Nelson.

Roese has been a champion of Nortel's unified communications strategy, which at times has seemed poised to deliver Nortel at least partly away from the pressures of the rocky carrier market and its long sales cycles. The company had issued a third quarter revenue warning recently, and reportedly wanted to sell its Metro Ethernet division. Nortel also had announced massive job cuts at the beginning of this year, and also now is saying it will evaluate its real estate holdings.

In late 2007, it seemed like the vendor had put some previous troubles behind it and might even be set to conduct an acquisition spree. It has made some interesting moves in 2008, eschewing WiMAX for LTE, acquiring VoIP player Pingtel and teaming with LG to buy WDM-PON developer Novera Optics, but its ongoing shrinkage suggests Nortel is far from re-gaining what was once its status as one of the top network equipment makers in the world.

For more:
- The Wall Street Journal reports [1]