Nortel does U-turn over redundancies

Nortel will axe 3,500 jobs just months after senior bosses promised there would be no staff cuts following its acquisition of Bay Networks in June.

When the $9.1 billion buyout by the telecoms giant was unveiled in June, Nortel claimed there would be no redundancies.

At the time, Chris Davies, marketing manager at Nortel's enterprise data networks unit, with which Bay has merged, said: 'There are not enough staff for our plans.'

However, a representative for Nortel this week confirmed reports in the Canadian press that it will lose about four per cent of its workforce, in a bid to restructure itself into an internet company.

While refusing to give details of where the job cuts would be, the representative admitted that 'every line of business would be affected'. The combined Nortel/Bay organisation employs 80,000 staff in about 150 countries.

The redundancies come a week after Nortel opened an office in Dublin, bringing the total number of employees in Ireland to 1,000. The sales office will support local distributors and will complement its R&D facility in Galway.

The buyout will involve a share swap to give Bay a 21 per cent stake in Nortel and is expected to win the seal of approval from its shareholders during the third quarter.

But Bay partners are concerned that its networking products will be sold direct by Nortel's sales team (PC Dealer, 24 June).