Nortel employees suddenly grew a few extra white hairs today as CEO Zafirovski announced that he will slash 1,900 positions while creating 800 new ones (in less expensive countries like China and India) worldwide as part of his ongoing plan to fix up Nortel's ugly image. Those affected will most likely be in finance and accounting and non-core services related positions.
In addition to white hairs, existing employees better start saving up more in their tin-boxes underneath their beds. Eliminating workers will only be part of its plan, as it Nortel will also review its pension plan, claiming that more efficient allocations will help cut by $100 million starting by 2008 (if acted upon now) and save the company more than $400 million by 2012.
The annoucement will most likely have a $35 million charge to the income statement in the second quarter of fiscal 2006, which will balances off the higher revenues forecasts as it moved earlier recognized amounts from the past to present.
In addition to rumours on possible mergers between Nortel and Motorola (after Nokia and Siemens tied the knot), and Nortel's continued restructuring plans, their share prices jumped almost 8% in a weeks time from US$2.02 to US$2.18 in early day trading.