After announcing it would not reach revenue expectations for Q1 2001, Nortel Networks top executives reacted by taking the axe to a further 6000 staff wordwide.
The vendor revised its expectations for first-quarter earnings, citing a "severe" US economic downturn, which sent its NYSE-listed stocks plummeting 33 per cent to a low of around $US19. The news was obviously expected by Nortel's top brass, who announced that the company would take the number of intended layoffs for the year to 10,000 across the globe.
"While we previously noted that economic uncertainties and capital constraints were impacting our outlook, we are now seeing a faster and more severe economic downturn in the US, which we now expect will result in a slower overall market growth of approximately 10 per cent in 2001," John Roth, president and CEO of Nortel, said in a statement.
For the first quarter, ending March 31, Nortel now expects to report revenue of $6.3 billion and a loss per share from operations of $0.04. That's a substantial drop from the $8.1 billion revenue and $0.16 per share earnings that Nortel said it expected to report just last month.
At that time, officials also said Nortel planned to cut 4000 jobs in low-growth areas. Nortel's Australian employees now have an anxious wait to see whether they too will be joining the fate of the unemployed. Elizabeth Lovett, marketing communications manager at Nortel Networks Australia, claimed it is not known at this stage how many staff will be culled in Australia.
However, Lovett confirmed that 50 staff have already been sacked across the country in the past two weeks. This represents 3 per cent of the company's local workforce and the potential is there for more.
The staff cuts have been restricted to technology areas as opposed to specific geographic areas, she added.