Nortel Networks has announced it plans to cut 3,500 jobs and may sell its optical-components division. This news came as the company said its Q2 revenues might be lower than previously forecast. The company has had problems meeting projections due to cost cutting by its customers.
Nortel is focusing on restructuring its long-distance optical business, which includes the potential sale of the optical-components division.
The company will take a charge of around $600 million, including $200 million in cash related to the restructuring, which will be added to the $150 million charge the company will take in its second quarter as a result of previous job cuts.
Nortel said it does not expect a recovery in the long-distance optical business before late 2003 or early 2004. The company added that it would focus on the areas expected to rebound when the market recovers, such as optical switching, photonic transport capabilities and network management.
The restructuring is expected to help the company to break even on quarterly revenue of $3.2 billion by the fourth quarter.