Nortel Details Job Cut Plan

The total of 3,250 jobs to be eliminated is down slightly from the rough number of 3,500 given in an August announcement by the global telecom equipment maker as it struggles to regain its financial footing following the tech crash and an accounting scandal.

The plan also includes the reduction of about two million square feet of occupied real estate, to be completed by the end of 2005.

"The decisions made to reduce our employee community and refine operational efficiencies have been undertaken in a very considered way," chief executive Bill Owens said.

"Our work force actions are focused to disproportionately protect customer and sales facing roles, as well as continue our focus on new innovative solutions."

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Nortel will cut 950 jobs in Canada, 650 jobs in Europe, Middle East and Africa and 250 elsewhere.

Nortel said it plans to post special charges of $450 millionfor its overall restructuring plan, with 35 percent of that counted this year and 65 percent in 2005.

The Brampton, Ontario-based company said it expects cost savings of about $500 million in 2005, "which are expected to increase on an annualized basis beyond 2005 as the full impact of the work plan is realized."

The company said overall costs of the work plan are higher than previous estimates mainly due to more extensive real estate actions, which are expected to result in greater long-term savings.

The telecom equipment giant is under investigation for possible accounting fraud in the United States and Canada.

The scandal has resulted in the firing of chief executive Frank Dunn and about 10 finance employees -- lawsuits and criminal investigations in Canada and the United States.

Earlier this month, Nortel said it expects its revenue in the third quarter to be lower than those reported for the second quarter.

The company plans to file delayed annual results for 2003 and complete results for the first two quarters of 2004 by the end of October.

U.S.-traded shares of Nortel fell a penny to $3.50 in morning trading on the New York Stock Exchange.

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