Nortel Networks Plans to Slash More Jobs

TELECOM

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Nortel Networks Ltd. said it will cut 7,000 more jobs, or 17% of its staff, and third-quarter revenue will miss forecasts because of a decline in spending on equipment by U.S. telephone companies.

North America’s second-biggest maker of telephone gear will reduce its work force to 35,000 by the end of the year, compared with a previous target of 42,000 by the end of September. Third-quarter sales will fall as much as 10% from the second quarter’s $2.77 billion. Last month Nortel said revenue would be roughly unchanged.

Sales are falling because some network operators such as Global Crossing Ltd. have filed for bankruptcy protection while survivors such as Sprint Corp. are cutting spending to preserve cash. Nortel said the reductions will let it return to profit, excluding certain expenses, with $2.6 billion in revenue, down from an earlier target of $3.2 billion.

Shares of Brampton, Canada-based Nortel fell 6 cents to $1.23 on the New York Stock Exchange.