Nortel Cuts: Layoffs Come to Telco Land

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NortelUpdated with information about Nortel cuts: Big job cuts are not just for startups. The grim reaper has started to take its tool on the telecom ecosystem. We have already reported about the job cuts at Nokia (600) and Motorola (3,000) and Nortel is likely to cut about 10 percent of its work force. The malaise has started to spread to component makers. For instance, JDSU cut 400 jobs, shut down seven R&D centers and three plants. Anadigics, a Warren, N.J.-based broadband wireless and wireline chip maker cut 15 percent of its work force. ST-NXP Wireless has cut its workforce by 500. Elsewhere Freescale and Verio also made some cuts. All these companies are reacting to the broader market declines and slowing demand from consumers. Vodafone, one of world’s largest telecom operators, is looking to cut jobs soon.

Update: Nortel today announced that it was cutting 1,300 jobs versus previously reported 3,000 cuts. Nortel had previously cut about 1,200 jobs. John Roese, Chief Technology Officer at Nortel along with some other senior managers is going to be leaving the company by end of this year. Roese, who participated in our Mobilize 08 conference, in my view is one of the smartest people when it comes to the broader direction of the telecom and technology industries. I think with his exit, Nortel loses a critical thinker. But right now it seems Nortel is fighting for its dear life as economic realities are crushing the company.

The original post was published yesterday.

8 Comments

GregR

I think Nortel’s problems have less to do with the economic situation, and more to do with the fact that their customer base is eroding very quickly. They have been largely unsuccessful in penetrating the Enterprise business with their networking and ip communications products, both of which Cisco has or now dominants.
The fundamental problem with Nortel is that they have lost their relevance in the markets they serve and their customers are moving to competitors. The fact that the economy has pulled back is of secondary importance.

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