Nortel Networks Corp. today outlined the next steps of its previously announced Business Transformation plan, chief...
February 7, 2007
Nortel Networks Corp. today outlined the next steps of its previously announced Business Transformation plan, chief among them being the scaling back of its global workforce by 2,900 employees.
The company announced that 70% of the reductions will occur this year and 1,000 positions will be shifted from higher-cost to lower-cost locations, with approximately 40% of that activity taking place in 2007.
“We are transforming Nortel and are focused on building a highly competitive organization that drives innovation and profitable growth,” said Mike Zafirovski, Nortel’s president and CEO.
The business model requirements include a significant reduction in general and administrative expenses, driven by simplified operations, reduced systems and improved processes, the company said.
In addition, Nortel said R&D investment will continue to be a top priority and though reduced, will be maintained at an “industry-competitive” 15% of total revenues.
“These are tough but necessary measures, and we recognize the impact they will have on affected employees,” said Zafirovski. “However, as we roll-out the various initiatives over the next two years, every effort will be made to leverage normal attrition and re-deploy affected employees to other areas of the company.”
Nortel also plans to reduce is global real-estate portfolio by more than 500,000 square feet of space this year.