Nortel Cuts Almost 2,000 More Jobs

Nortel, the Brampton-based firm that became a worldwide phenomenon during the dot-com communications boom of the 90s, has announced it’s cutting another 1,900 jobs across the globe.

The latest losses are part of what the company refers to as its “Action Plan to Improve Operating Margins and Business Performance”.

But the bottom line is that almost 2,000 positions will disappear.

And in a move sure to upset the employees who remain, the wounded giant will also make changes to its pension plan, eliminating post retirement health care benefits for employees who aren’t at least 50 years old by this coming Saturday, July 1st.

Workers’ pensions will be shifted into more predictable defined contribution programs, reducing Nortel’s unfunded pension liability deficit by about $400 million U.S.

Most of the changes will be delayed for 18 months and the company insists those who are already retired won’t notice any difference at all.

The company, which made headlines when it chopped 10,000 jobs in 2001, another 35,000 in 2002 and a further 3,500 in 2004, is still struggling to regain its footing after being hit by an accounting scandal and weak earnings.

It claims the job cutting moves will wind up saving it $100 million in 2007 and $175 million (U.S.) in 2008.

“I am confident in the progress we are making in turning around Nortel and recreating a great company,” President and C.E.O. Mike Zafirovski notes in a statement. “In the past few months we’ve taken important steps, some with near-term impact, and others with longer-term benefits, toward transforming our operations to be more efficient and customer-focused.”

Still, depending on where you are, it’s not all bad news. The company plans to create 800 new positions in its Operations Centres of Excellence. But if you want one of those jobs, you’ll likely have to move to get it.

Nortel intends to base its two new centres in Mexico and Turkey, where labour costs are lower and more people are looking for work.

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