Nortel 'committed' to Ireland despite job cuts
08-02-2007
by Charlie Taylor

Following its announcement that it is to reduce its headcount globally, telecoms equipment firm Nortel has said that it remains committed to Ireland.

The company said on Thursday that it plans to reduce its global workforce by approximately 2,900 positions during the course of 2007 and into 2008, with around 70 percent of job losses to occur this year.

The firm announced that it also intends to shift around 1,000 positions from higher-cost to lower-cost locations, with almost half of this move happening in 2007. In addition, the firm said that it will reduce its R&D spend.

The company has been based in Ireland since 1973 when it opened up a facility in Galway. Nortel now employs 975 people on the island of Ireland with 300 staff based at the firm's research and development facility in Galway, 25 at a small sales office in Dublin and 650 at its European Supply Management Centre in Monkstown, which is located just outside of Belfast.

Speaking to ENN, David Silke, EMEA Communications Director for Nortel said that while he couldn't promise that there wouldn't be local redundancies, the company remained committed to Ireland.

"With regard to redundancies, there's no specific breakdown as of yet but the majority of the impact will be in North America. I can't give a guarantee that there won't be any impact in Ireland but I think that what's important to stress is that even though Nortel will be reducing the overall investment on R&D we will still maintain a 15 percent revenue spend on R&D and that what we focus on in Galway is one of the high-growth areas in research and development.

"In Galway we run the global research and development centre for multimedia applications, which is a critical component of our business and is also critical in relation to our recently announced partnership with Microsoft, so the operation in particular is going to play a critical role in the company going forward," he continued. "We came to Ireland in 1973, the same year that the country joined the European Union. We've been an essential part of the community since then and have recently invested significantly in our Galway facility which is to have a major reopening in May. This shows that our relationship in Ireland is strong and is set to continue," Silke concluded.

Nortel's business transformation plan is aimed at increasing the company's global competitiveness and achieving double-digit margins. Upon completion, these actions are expected to deliver approximately USD400 million in annual savings, with approximately half of the savings expected to be realised this year.

In a statement released on Wednesday, Nortel's president and CEO Mike Zafirovski said in a statement that the firm recognised the impact the new measures would have on employees.

"As we roll-out the various initiatives over the next two years, every effort will be made to leverage normal attrition and re-deploy affected employees to other areas of the company. Our goal is nothing short of creating a high-performance, successful and profitable enterprise based on a highly motivated work environment powered by strong business results," said Zafirovski.