Nortel Networks will cut 2,100 jobs from its global workforce and will relocate 1,000 of its employees after posting a fourth-quarter net loss of US$844 million.
The job cuts are part of a business transformation plan the company adopted in hopes of reducing operating costs and improving Nortel's place on the global market, the telecommunications company said Wednesday.
The losses were caused by a writedown of Canadian tax assets. In the latest workforce reduction, the Toronto-based company has cut tens of thousands of jobs and has fired a number of executives since being marred by an accounting scandal and since the dot-com balloon broke.
"It is a challenging environment,'' Nortel president and CEO Mike Zafirovski said Wednesday in a conference call."There is pressure in North America, particularly on the carrier side."
But Zafirovski said there is positive market momentum and customer confidence has largely been restored.
"There is an absolute commitment to competitiveness,'' he said, adding that Nortel will "do everything possible to redeploy the impacted employees."
Zafirovski said the job cuts -- 70 per cent of which will come this year -- will occur through an "orderly and considered process."
Employees that are to be relocated will be transferred to "higher growth and lower cost geographies," according to the company's news release.
The reported fourth-quarter loss follows a one-time charge of US$1.06 billion for the valuation allowance against a Canadian deferred tax asset.
The company reported $3.2 billion in revenue during the quarter -- down four per cent.
Their revenue for the year also decreased by four per cent to $10.95 billion.
With files from The Canadian Press
