Nortel to cut jobs, restructure after dismal Q3

Nortel has announced plans to slash 1,300 jobs in an attempt to stave off the effects of the market crisis, which has already resulted in a $3.4 billion third quarter loss.

The company posted revenue of $2.32 billion for Q3, down 14% from a year ago. Gross margin from sales also declined, and now stands at 39.2%.

Having already managed to reduce operating expenses by $138 million this quarter, Nortel hopes to shave the budget further, saving an additional $400 million in annual gross costs in 2009.

To accomplish this, in addition to the job cuts, the company has extended its hiring freeze through 2009, and plans to freeze salaries.

Executives won't be spared from the chopping-block either - Nortel plans to eliminate or consolidate executive and management positions company wide. The company's CTO and chief marketing officer will depart on January 1, as will the global services president and the executive vice president of global sales.

"It is always difficult to see colleagues go, but we made the necessary decision to consolidate our executive layer and reshape Nortel," Nortel CEO Mike Zafirovski said in a statement. 

Nortel will also go ahead with its plan to decentralize a number of corporate functions. Under the new model the Global Services and Global Operations divisions will be decentralized and transitioned into the company's business units by April 2009.