Nortel layoffs to impact Ottawa

Nortel says cuts to staff will be felt at its Ottawa offices.

The company says it will cut 2,100 jobs from its global offices and 1,000 other jobs will be moved outside Canada. The layoffs will be spread over the course of the next year.

"There will be impacts in Ottawa," company spokesperson Ann Fuller told CTV News. "It's a tough decision, there's no question about it because it impacts the people that we work with - our friends and our colleagues."

Fuller says even though it's tough to accept the layoffs, it's a move that had to be made.

"In order to build a future for the broader Nortel, it's a necessary step," she said.

There is no word on how many jobs will be lost in the Capital. The company has cut 5,000 jobs in the last few years.

Nortel reported a year-end loss and an overall drop in revenue on Wednesday.

"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."

Despite the loss, Zafirovski remained optimistic about the company's future.

"We have a ways to go. We are not declaring that anything's complete," he said, adding that Nortel will "do everything possible to redeploy the impacted employees."

Zafirovski says the underlying trends are good and maintains that Nortel is in better fiscal shape than its competitors.

He cautions, however, that they are only mid-way into a five-year turnaround process and a slumping U.S. economy isn't likely to make business any easier.

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.

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 a company news release.

Jeffery Dale, president of the Ottawa Centre for Research and Innovation, told CTV News he is "shocked and surprised" by the layoff news.

Dale says Nortel officials have told him most of the layoffs will be in North America but Ottawa is expected to remain the company's global research centre.

Dale says the job cuts demonstrate the need for government to pay more attention to the telecom sector and their concerns.

He says if government doesn't step in to give the industry tax incentives for research, the tech sector could see telecom firms leave the country to do business elsewhere.

John Reid, the president of Canadian Advanced Technology Alliance, says Nortel layoffs should serve as a "wake-up call" to the industry.

"It just shows you how sensitive - how mobile - enterprises are," said Reid. "I mean the message was we're moving to lower cost, faster growth economies so the question is 'where does Canada stack up?'"

With a report from CTV's Paul Brent and files from The Canadian Press