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Nortel to axe more Irish workers 
Monday, July 22 2002
by Matthew Clark


Beleaguered telecoms equipment maker Nortel cut more jobs in Ireland on Monday as
the firm followed through on a job slashing plan announced in May. 

Around 40 staff, or nearly 9 percent of Nortel's Galway workforce, will be made
redundant in the coming weeks following the news. In total, Nortel has 370
workers in the Republic of Ireland, with 350 of those based in Galway and the
remainder in Dublin. The company also has 900 workers at a plant in Belfast.



In a statement, the company said that order management and support functions
would primarily be impacted, and the company went on to say that it would work
with employees to "minimise the impact" of the job losses. Nortel has now
entered into consultations with employees to determine the scope and nature of
the cuts, as well as any redundancy packages to be offered.  



A spokesperson for Nortel told ElectricNews.Net that no cuts are planned for the
Northern Ireland facility, which has seen around 1,000 jobs go in the last two
years. The company's operations in the Republic have not fared much better,
having experienced 150 layoffs in October 2001. The spokesperson went on to
stress that none of Monday's cuts would come in its research and development
operations in Galway. 



In late May, Nortel said it would cut 3,500 jobs worldwide in its optical
networking operations, taking a charge of USD600 million. At the time, the
Canadian telecommunications equipment maker said it did not expect a meaningful
recovery in the optical networking market before the end of 2003 or early 2004.
This move, along with many others like it in recent months, is designed to reduce
Nortel's global workforce to around 42,000, from a high of 95,000 in January
2001. 



What's more, it seems that the cost-cutting programme may continue for the rest
of year, after the firm made some rather ominous comments last week. In its
results, Nortel Networks posted more losses for the second quarter, although it
did match estimates. In a bleak forecast that came with the results, Nortel
predicted that its customers will continue to keep capital spending down until
2003, and the firm forecast flat sales in the current quarter. 



Moreover, the company said that in this difficult environment it may have to cut
more costs as it reviews its break-even target of USD3.2 billion in quarterly
sales. It's worth noting, however, that the firm did not announce any specific
job-cutting measures as part of its new cost-cutting plans, and it declined to
say if any such plans were in the works. 



The Canadian company matched forecasts with a pro forma loss of USD0.09 a share
in the quarter with sales of USD2.77 billion, just slightly below consensus
targets of USD2.8 billion. Second-quarter net loss was USD697 million, or USD0.20
a share, much better than last year's loss of USD19.4 billion, or USD6.08 per
share, which was mostly due to a USD14 billion write-down for acquisitions.