Phase one of Nortel's rebuilding process threatens 4000 staffThe effects of Nortel Networks' reconstruction process are beginning to take hold with North American and European manufacturing and repair plants up for sale, putting 4000 jobs on the line.
According to Chahram Bolouri, vice president of Global Operations, the cost reductions are the first phase of a plan Nortel announced in January this year, which will ultimately involve the release of 8000 staff, the sale of several manufacturing plants and an anticipated saving of $US250 to $300 million a year for the next three years.
The immediate goal is to sell its manufacturing plants in the US, Canada and Europe to contract manufacturers.
Nortel predicts that the eventual buyers will retain 3000 of the 4000 staff working in these plants. In the event that no buyers are found, the plants could close and the staff laid off.
By relinquishing its responsibility for the manufacturing plants, Nortel is hoping to instigate a cheaper, more service-orientated approach to business, moving away from its traditional focus as a telecom manufacturer to a software and network solutions provider, explained Bolouri in a Nortel statement.
According to the statement, operations performed around the world will be consolidated in seven global systems houses, which Nortel hopes will encourage a move from entrenched internal manufacturing to a supply-chain system.
"Nortel will divest to contract manufacturers all electromechanical subsystems, manufacturing and a significant part of its repair business while still retaining all customer interfaces," the company announced.
A Nortel Australia spokesperson is adamant that local operations will remain relatively unscathed, with staff cuts isolated in North America and Europe and the advent of systems houses posing only minor changes to current operational procedures.