Nortel Posts Loss, Cutting 1,300 Jobs
Nortel Networks (NT) said Monday it plans to cut 1,300 jobs as it reported a third-quarter loss of $3.4 billion, or $6.85 a share.
In the year-earlier quarter, the Canadian telecommunications company earned $27 million, or 5 cents a share.
The latest quarter included an increase in the valuation allowance against deferred tax assets of $2.07 billion and a goodwill write-off of $1.14 billion. The adjusted loss in the quarter was $150 million, or 30 cents a share.
Revenue in the third quarter fell 14% to of $2.32 billion, the company said.In addition to the job cuts, Nortel said it plans to flatten its corporate structure, eliminate or consolidate executive and management positions, freeze salaries and extend its existing hiring freeze through 2009. Nortel said the cost-cutting moves are expected to reduce annual gross costs by about $400 million in 2009. The company also lowered its revenue and operating margin forecasts for 2008. "In September, we signaled our view that a slowdown in the market was taking place. In the weeks since, we have seen worsening economic conditions, together with extreme volatility in the financial, foreign exchange and credit markets globally, further impacting the industry, Nortel and its customers," Nortel said in a statement. "We are therefore taking further decisive actions in an environment of decreased visibility and customer spending levels."
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