Nortel ( NT) is moving toward further cost reductions as it deals with a soft telecom spending environment.

The Brampton, Ontario, maker of networking gear said Tuesday that it continues to work on a far-ranging restatement of past financials. Nortel said it hoped to begin updating investors on its findings by next month.

The company has been hit hard this year by findings that earnings were overstated going back several years. Nortel in April fired CEO Frank Dunn and several other top execs for cause amid an expanding accounting probe.

In the meantime, the company hinted Tuesday that further job cuts may be in the offing. "It has become clear that we will need to put into place an improved cost structure to drive financial performance," CEO Bill Owens said. "The company will take the necessary steps to ensure that our operations and our investments are focused and that we are creating and leveraging our competitive advantages.

"The current year has been an extremely challenging one for Nortel Networks in light of our various announcements," Owens added. "That being said, we are committed to placing Nortel Networks in a position to succeed as we move through 2004 to 2005 and beyond."

The comments come at the end of a long stretch of job-cutting for Nortel. The company has slashed its workforce by two-thirds over the last three years amid a sharp decline in network spending. This summer, Nortel agreed to sell its remaining manufacturing operations to Flextronics ( FLEX).

Nortel shares rose 3 cents early Tuesday to $4.26.

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