Nortel to slash 500 jobs

BANGALORE: Nortel Networks Corp announced details of the latest step in its three-year

restructuring program, the sale of some of its communications equipment-making operations

to five companies and about 500 jobs slashed. Reorganization would mean plant sales,

greater reliance on outsourcing and reduction of its staff.

Nortel has reached outsourcing deals with Huntsville, SCI

Systems Inc., C-MAC Industries Inc. and Sanmina Corp, all publicly traded companies. The

value of the outsourcing deals is expected to total more than $1 billion in the first year

alone. Nortel expects gross proceeds of about $400 million from sales.

In January, Nortel said they would begin a three-year

restructuring that could result in the lay off or transfer of up to 8,000 employees, or 10

per cent of its staff at that time.

In May, Nortel named 11 operations that it wished to sell

and said it would have annual savings of $250 million to $300 million when the

reorganization is over. Of the 11 operations, eight would change hands, one would remain

with Nortel and two others would have their manufacturing branches shut down.