Nortel Networks will be cutting an additional 3,200 jobs, or more than 10 percent of its workforce worldwide over the next several months as the company tries to survive a bankruptcy restructuring.
Nortel, which makes telecommunications equipment, had already announced 1,800 job cuts last year. The company currently employs about 30,000 people around the world. In the 1990s and early 2000s, during the telecom boom, Nortel employed about 95,000 workers. And at one point in 2000 the company accounted for one-third of the market value on the entire Toronto Stock Exchange, the Associated Press reported.
But the past several years have been difficult for Nortel as it has struggled to regain its footing in a changing telecommunications market. The worldwide recession has only worsened Nortel's problems. And the company filed for bankruptcy protection in the U.S. and Canada last month.
When it filed for bankruptcy protection, Nortel had about $2.4 billion in cash. The company hoped it could use the cash "to preserve its liquidity and fund operations during the restructuring process." But The Wall Street Journal reported earlier that court documents show Nortel has liabilities of $11.8 billion, but only has consolidated assets of $11.6 billion.
And just last week the company was dealt another blow when it was not named by Verizon Wireless as one of its suppliers to build the cell phone operator's new 4G wireless network that will use a technology called LTE or Long Term Evolution. Verizon plans to begin building the network this year and will aggressively deploy the speedier network in 2010.