Nortel stays mum on reduction details

Nortel stays mum on reduction details

Nortel Networks is reluctant to detail its latest rounds of cuts, but rumours about where the company's axe will fall are flying.

Nortel revealed on Wednesday that it would be slashing 7,000 jobs, and that it expects revenue could fall by as much as 10 per cent in the third quarter.

While some reports indicate senior management positions will be affected by the cuts, one analyst said they are more likely to be based on the firm's product lines.

"I don't believe that [the cuts] will be in their areas of wireless and fibre optics," said Dan McLean, director of outsourcing and IT utility research at IDC Canada. "I think that once the company sees better days, those two areas are going to be pretty key for them."

Carriers are really taking a look at wireless right now, McLean explained, and Nortel has a lot of great fibre-optic technology, so these are areas that will be safe. He added that IP is another facet of Nortel's business that is not likely to be affected.

"I think pretty much all other areas of the company are at risk in terms of product areas. I would also suggest that their traditional telephony communication areas, their circuit-switched areas, are probably most highly at risk because that's technology that is being phased out. It's technology that is coming to an end and being replaced by a lot of IP-based stuff."

A Nortel spokesperson said details surrounding the latest workforce reduction would be revealed in October.

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