Woo boy, I guess I was a little more right than I thought about more bad economic news; this time it hits a little closer to home.
Canadian telecommunications equipment manufacturer Nortel Networks has posted a loss of US$3.4 billion in Q3 2008, it’s largest loss in the past seven years. Revenue was down 14% year over year to US$2.32 billion and 1% year-to-date.
Commenting on the market dynamics, Nortel President and Chief Executive Officer Mike Zafirovski said: “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. We are therefore taking further decisive actions in an environment of decreased visibility and customer spending levels.”
Nortel also announced plans to cut a further 1,300 jobs, on top of a previous round of cuts of 1,200 staff. About a quarter of the job cuts will occur this year, with the rest in 2009. None of the remaining staff will receive pay rises in 2009, unless already agreed. The cost savings are expected to reduce annual gross costs by approximately US$400 million in 2009.